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                             1001 of 2746 DOCUMENTS


                        Financial Times (London,England)

                             March 15, 2002 Friday
                                 USA Edition 1

Lockerbie bomber appeal rejected

SECTION: SHORTS ; Pg. 1

LENGTH: 45 words


Lockerbie bomber appeal rejected

Appeal judges upheld the conviction of a former Libyan intelligence agent for
planting the bomb on the New York-bound Pan Am jumbo jet that exploded over
Lockerbie, Scotland, in 1988 killing 270. Britain, Page 8; Failed appeal, Page 6

LOAD-DATE: March 14, 2002

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                        Financial Times (London,England)

                            March 14, 2002 Thursday
                                London Edition 1

Binding N-weapons deal with Moscow may be ready by summit, says Rumsfeld

BYLINE: By EDWARD ALDEN

SECTION: THE AMERICAS ; Pg. 7

LENGTH: 430 words

DATELINE: WASHINGTON


The US and Russia yesterday said they would try to agree to legally binding
reductions in their nuclear weapons arsenals by the time US President George W.
Bush and Russian president Vladimir Putin meet at a summit in May.

Donald Rumsfeld, US defence secretary, said at a news conference in Washington
that the two presidents had "agreed that they would like to have something that
would go beyond their two presidencies. "So some sort of document of that type
is certainly a likelihood."

Sergei Ivanov, Russian defence minister, said that the two sides had exchanged
draft proposals for a future agreement and said he was optimistic that a deal
could be reached before the summit.

The US, which has pledged to cut its nuclear weapons force by two-thirds, has
been reluctant to enter into a formal arms control agreement. The Bush
administration has argued that past arms control arrangements did little to
reduce the overall nuclear threat.

But the US signalled earlier this year that it would accede to Russian wishes
for a formal accord, and the two sides indicated yesterday they had made
progress towards a final agreement.

The two ministers did not say whether they had resolved their differences over
US plans to keep the dismantled nuclear warheads in storage rather than
destroying them permanently, as Russia is seeking. The US plan has triggered
criticisms from Russia, which says it wants any nuclear cuts that are agreed to
be irreversible.

But Mr Ivanov said yesterday that regardless of US plans, Russia would likely
have to destroy some of its warheads.

"It is true that for some period of time those warheads could be stored or
shelved, but the time will inevitably come when those will have to be
destroyed," he said. He added that the same is likely to be true for nuclear
delivery systems.

Mr Rumsfeld also attempted to allay international fears over the disclosure last
weekend of a classified Pentagon document outlining the administration's
thinking on nuclear weapons. The study, known as the nuclear posture review,
broadened the potential targets for US nuclear attacks.

He sought to reassure Russia that, while the US remains concerned about its
"formidable nuclear capabilities," the US no longer sees Russia as an adversary.

However, Russia is one of the seven countries named in the report as possible
targets in a future nuclear conflict. The others are China, Iraq, Iran, North
Korea, Syria and Libya.

Mr Rumsfeld insisted the report "says nothing about targeting any country with
nuclear weapons. The US targets no country on a day-to-day basis".

LOAD-DATE: March 13, 2002

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                        Financial Times (London,England)

                             March 12, 2002 Tuesday
                                London Edition 2

Concern greets new US nuclear doctrine: Allies are already nervous about the
widening war on terrorism, writes Edward Alden

BYLINE: By EDWARD ALDEN

SECTION: WAR ON TERROR: THE NEXT PHASE ; Pg. 12

LENGTH: 638 words


For most of the cold war, the US and the Soviet Union largely accepted the
doctrine that nuclear weapons were so massively destructive they were good for
only one thing: dissuading other countries from using them.

But with the war on terrorism as the focus of current US strategic doctrine,
military planners have undertaken a thorough rethink of how and when nuclear
weapons might be used in a war against a range of adversaries, such as Iraq,
Iran, North Korea and even Syria and Libya.

The conclusions, contained in the administration's nuclear posture review
presented to Congress in January, are likely to be unsettling for US allies who
are already nervous about the widening war on terrorism.

"This represents a dramatic change in US nuclear policy," said Joseph
Cirincione, director of the non-proliferation project at the Carnegie Endowment
for International Peace, a research group. "This is not business as usual."

Two elements in particular stand out from the study.

First, the Pentagon review calls for development of smaller and more accurate
nuclear weapons with special capabilities, for example, for destroying
underground bunkers.

Administration officials argue that such a shift would be intended only to
strengthen deterrence against so-called rogue states that might be tempted to
use chemical, biological or nuclear weapons. Condoleezza Rice, President George
W. Bush's national security adviser, said the only way to deter the use of such
weapons "is to be clear that it would be met with a devastating response".

But the claim that deterrence is the only goal is weakened by the report's other
main platform: that the US has broadened the circumstances under which it might
be prepared to use nuclear weapons in a war.

In particular, the study indicates the US might use nuclear strikes pre-
emptively against countries developing weapons of mass destruction and could
also do so in the event of large-scale conventional attacks, such as an Iraqi
invasion of Israel or a North Korean invasion of South Korea.

The new doctrine overturns a US policy that dates back to 1978, in which the US
first stated publicly it would not use a nuclear strike against any state that
did not have its own atomic weapons, unless that state attacked the US in
alliance with a nuclear weapon-armed state.

Mr Cirincione argues that the new approach is dangerously provocative by taking
away the previous safe harbour offered to states that refrained from building
their own nuclear weapons. "If you're Iran and you are now being threatened with
a nuclear attack whether or not you've got them, are you better off acquiring
nuclear weapons?"

The disclosures throw a different light on testimony by US officials last month
on the nuclear posture review, which at the time had only been seen by selected
members of Congress.

Douglas Feith, undersecretary of defence for policy, said the administration
envisaged using nuclear weapons not only for deterrence but also "for holding at
risk highly threatening targets that cannot be addressed by other means". In the
future, he said, nuclear weapons would be "integrated with, rather than treated
in isolation from, other military capabilities".

The controversy is the second that the administration has faced over the
classified nuclear posture review, first presented to Congress in early January.

At the time, the administration was focused on its plan to reduce the overall
nuclear arsenal to less than 2,000 warheads but later revealed the warheads
would merely be stored rather than destroyed.

* Russia and the US may not have a planned arms reduction deal ready to sign
when President George W. Bush visits Russia on May 23, Sergei Ivanov, Russia's
defence minister, said yesterday, Robert Cottrell reports from Moscow. Talks
were "moving fairly slowly", Mr Ivanov said.

LOAD-DATE: March 11, 2002

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                        Financial Times (London,England)

                             March 11, 2002 Monday
                                London Edition 1

President Bush and the bomb

SECTION: LEADER ; Pg. 22

LENGTH: 641 words


The US administration is determined to prevent the proliferation of weapons of
mass destruction, including nuclear as well as chemical and biological devices.

That is both necessary and understandable. Such weapons, in the hands of rogue
states such as Iraq or North Korea, would pose an unacceptable threat not only
to America, but even more immediately to neighbouring states and other US
allies. But Washington must ensure that its own policies do not encourage rather
than discourage such proliferation.

Such a concern is the main worry aroused by the latest Nuclear Posture Review
produced by the Pentagon. The document, secretly tabled in the US Congress in
January but only leaked into the public gaze at the weekend, suggests that new
types of nuclear weapon need to be developed by the US to deal with new
contingencies in which the nuclear option might be used.

Among the countries listed as presenting such "immediate, potential or
unexpected" contingencies are North Korea, Iraq, Iran, Syria and Libya. Another
is China, in the case of a military confrontation over Taiwan.

The implication is that the US may be and should be prepared to use nuclear
weapons in a first strike against a country that does not itself necessarily
possess them. Apart from China on the list, only North Korea is thought to
possess enough fissile material to produce a nuclear device. Its capacity to use
it is doubtful.

Nuclear departure

Such a redefinition of US policy would amount to a disturbing departure from the
long-standing US position: that it would not use a nuclear device against a
non-nuclear state that has signed the Non-Proliferation Treaty. The reassurance
was given precisely in order to persuade the maximum number of countries to sign
the treaty. By suggesting that they could still face nuclear attack, even if
they have no nuclear weapons, the Pentagon could merely be giving them an
incentive to develop their own dreadful weapons to retaliate. The Nuclear
Posture Review was not intended for publication. Nor was its thinking meant to
indicate specific targets, according to a Pentagon statement.

The review indicates that a return to nuclear testing may be necessary in order
to develop new types of device, such as "earth-penetrating" nuclear weapons. But
Colin Powell, secretary of state, insists that the administration has no plans
to develop new types of device, nor to resume testing.

Dissonant views

Clarification of US thinking is urgently needed, not least to reconcile the
often dissonant views from the Pentagon and the State Department.

The leaking of the nuclear posture document is likely to complicate the
12-nation visit to Europe and the Middle East on which Vice-President Dick
Cheney embarked yesterday. The prospect of several Middle Eastern countries
being nuclear targets is likely to cause grave concern, even to America's
closest allies.

None of the countries listed by the Pentagon as potential targets for nuclear
attack has many friends. All have been attempting to acquire one or other form
of weapons of mass destruction in recent years. They should be stopped. But
threatening nuclear strikes, whether tacitly or explicitly, is not the way to do
it.

Such threats should not be made unless they are capable of being implemented. If
they are serious, then it suggests a willingness in this US administration to
contemplate the use of nuclear weapons more readily than before. That gives a
very worrying signal to others, such as India and Pakistan, that have just
acquired them.

As the sole superpower, the US possesses an awesome military arsenal, including
its own weapons of mass destruction, with which no other power can compete. But
possessing awesome power brings with it an awesome responsibility to exercise
restraint. That is the message President George W. Bush needs to preach just
now.

LOAD-DATE: March 10, 2002

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                        Financial Times (London,England)

                             March 11, 2002 Monday
                                London Edition 2

US signals tougher N-strike response ATTACK WARNING TO 'ROGUE STATES':

BYLINE: By EDWARD ALDEN and BRIAN GROOM

SECTION: FRONT PAGE - FIRST SECTION ; Pg. 1

LENGTH: 494 words

DATELINE: WASHINGTON and LONDON


Changes in US nuclear weapons strategy will send a clear message to states such
as Iran, Iraq and North Korea that large scale attacks against the US or its
allies would be met with devastating consequences, top officials said yesterday.

In a significant switch in nuclear planning, the US will focus more on hostile
nations that have or could develop weapons of mass destruction than on
traditional nuclear weapons states such as Russia and China.

Condoleezza Rice, national security adviser to President George W. Bush, said on
NBC yesterday that the only way to deter adversaries from using weapons of mass
destruction "is to be clear that it would be met with a devastating response".

The stance, contained in a report presented to Congress in January, was leaked
over the weekend as Dick Cheney, US vice-president, arrived in London yesterday
on the first leg of an extended tour of Europe and the Middle East to discuss
the war on terrorism and the US position on Iraq.

Tony Blair will talk to Mr Cheney at Downing Street today against a background
of cabinet tension over the prospect of US military action against Iraq and
Britain's possible support for it.

That tension surfaced yesterday when Clare Short, international development
secretary, told the BBC that while failing to address Iraq's weapons of mass
destruction "could bring disaster to the world", all-out military attack "is of
course not at all sensible".

The Pentagon report, called the Nuclear Posture review, names Libya and Syria as
countries at which US nuclear deterrence should be aimed and risks alarming Arab
and European allies. Akbar Hashemi Rafsanjani, Iran's influential former
president, said yesterday the US was trying to intimidate other nations.

The report raises the possibility of a pre-emptive nuclear strike against such
states and calls for the development of nuclear missiles that could penetrate
underground bunkers thought to harbour dangerous weapons programmes.

The US might use a nuclear strike to destroy enemy stockpiles of chemical or
biological weapons or to respond to conventional attacks such as an Iraqi
invasion of Israel or a North Korean attack on South Korea, according to the New
York Times, which obtained a copy of the report.

US officials attempted yesterday to play down the report, stressing that it
represents a "posture" rather than a "policy".

Colin Powell, US secretary of state, said on CBS News yesterday that the US had
no plans to develop new nuclear weapons or to resume testing.

He also pointed out that US nuclear arms were not aimed at any particular
adversary.

Mr Powell said other countries should not be alarmed by what he called "sound
conceptual planning . . . We should not get all carried away with some sense
that the US is planning to use nuclear weapons in some contingency that is
coming up in the near future. It is not the case." Short argues, Page 2 'Axis of
evil', Page 7 Editorial Comment, Page 22 www.ft.com/terror

LOAD-DATE: March 10, 2002

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                        Financial Times (London,England)

                              March 8, 2002 Friday
                                London Edition 2

Threats grow as Zimbabwe count beckons: Mugabe has pledged retribution and his
party has made it known it would back a coup if the opposition wins, says Tony
Hawkins

BYLINE: By TONY HAWKINS

SECTION: AFRICA & MIDDLE EAST ; Pg. 9

LENGTH: 597 words


Thirty-six hours before polling stations open for Zimbabwe's make-or-break
presidential election, there is mounting anxiety over the likely extent of
official vote-rigging and the possible consequences of a government attempt to
nullify the result.

President Robert Mugabe ratcheted up his rhetoric of violence with a warning of
"retribution" against the country's 60,000 or so remaining whites. "No murderer
will go unpunished," said Mr Mugabe, adding: "We'll see this issue to its
conclusion once this (election) is out of the way."

Mr Mugabe's rhetoric was matched by that of Didymus Mutasa, the ruling party's
external affairs spokesman. He told South African Television that "the majority
did not want to live under a Movement for Democratic Change government.

"If there were to be a coup, we would support it very definitely," he said.

But Morgan Tsvangirai, the presidential candidate for the opposition Movement
for Democratic Change, ruled out any chance of a post election coup.

"The people's victory at a weekend poll is now certain" he said. "The people
will vote for change and for answers to the burning issues of the day -
starvation, food shortages, economic collapse, joblessness and the ever
increasing prices of food and basic commodities".

There is growing concern over the increasingly chaotic administrative
arrangements for the election. One opposition official said last night that if
there was a large turnout - as widely anticipated - it might be necessary to
extend the two-day poll for another four days so that everyone had a chance to
vote. This is because, in an effort to keep urban voting to a minimum, the
government has more than halved the number of polling stations in the country's
most heavily populated areas.

The mood of trepidation is apparent too in business. "Nothing is moving, said an
estate agent. "No-one is willing to make decisions at this stage". Most
multinationals have kept a very low profile throughout the campaign, conscious
that support for Mr Tsvangirai could make them vulnerable to retribution.

The Mugabe administration has built close links with local businesses and banks
that have helped finance government contracts, including those linked to the
nation's military involvement in the civil war in the Democratic Republic of
Congo. However its connections with international business are limited.

Some eyebrows were raised recently when Anglo American appointed a Zanu-PF
political heavyweight to the board of one of its mining companies in Zimbabwe.

Swimming against the tide, two big South African companies, ABSABank and Impala
Platinum, have invested in Zimbabwe in the last two years, despite the rapidly
deteriorating economic situation. ABSA owns 26 per cent of the Commercial Bank
of Zimbabwe, which handles the country's oil transactions with Libya as well as
playing a prominent role in other government financing deals.

Gideon Gono, its chief executive, is a Mugabe loyalist who serves as chairman of
the Zimbabwe Broadcasting Corporation, which plays a central role in the
president's re-election campaign.

Mr Mugabe is backed also by white business tycoon, John Bredenkamp, one of a
number of prominent white and black businessmen for whom a Mugabe defeat would
be a serious setback, especially since the MDC has plans to convene a Truth and
Justice Commission, to investigate how the government managed to spend as much
money as it did during the 1990s.

By contrast, the MDC, while supported by the bulk of the white electorate of no
more than 15,000 voters, does not have close ties with business.

LOAD-DATE: March 7, 2002

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                        Financial Times (London,England)

                             March 7, 2002 Thursday
                                London Edition 2

Syria voices support for Saudi peace plan

BYLINE: By GARETH SMYTH

SECTION: MIDDLE EAST & AFRICA ; Pg. 11

LENGTH: 405 words

DATELINE: BEIRUT


Syria yesterday indicated that a Saudi Arabian peace plan includes the right of
return of Palestinian refugees while imposing strict conditions for Arab-Israeli
peace.

The official Syrian news agency Sana reported that Syria's views were "identical
with the ideas presented by the Saudi Crown prince", following the visit of
Bashar al-Assad, the Syrian president, to Jeddah on Monday.

Crown Prince Abdullah launched his "peace plan" more than two weeks ago,
reviving an old idea of "land for peace" by which Israel would leave occupied
Arab land in return for recognition by the Arab states.

Despite discussions with European and Arab diplomats, the Saudis have not as yet
elaborated on what one Saudi official has called a "vision" designed to "send a
signal to the Israeli public that peace is possible".

Syria hosts many radical Palestinian groups in Damascus and has given strong
rhetorical support to the Palestinian uprising.

"So much was unstated in Crown Prince Abdullah's formulation that everyone seems
free to interpret it as he sees fit," said an analyst in Damascus yesterday.

The rapport between Mr Assad and Crown Prince Abdullah makes it likely that -
with the exception of Iraq and Libya - an Arab summit in Beirut later this month
will endorse the Saudi initiative in some form.

But this does not make Syria's conditions acceptable to Israel.

Sana said Syria and Saudi Arabia had agreed that a "just and comprehensive
peace" required "full Israeli withdrawal from the occupied Arab territories,
including from the Syrian Golan Heights to the line of June 4 1967" as well as
"the establishment of an independent Palestinian state with Jerusalem as its
capital" and "the right of the (Palestinian) refugees' return in accordance with
related UN resolutions".

Israel has consistently refused to accept the line of June 4 1967 in the Golan
as a basis for negotiation. It is committed to Jerusalem as its "eternal and
indivisible capital" and regards the return to Israel of 3.6m Palestinian
refugees as a threat to its existence.

* Kamal Kharrazi, Iran's foreign minister, expressed his guarded endorsement of
the Saudi initiative, in contrast to hardliners in Iran who have rejected the
proposal outright, Najmeh Bozorgmehr adds from Tehran.

He did not say, however, whether Iran supported the prospect of relations with
Israel if it withdrew to pre-1967 borders. For regional reports,
www.ft.com/mideastafrica

LOAD-DATE: March 6, 2002

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                        Financial Times (London,England)

                              March 4, 2002 Monday
                                London Edition 2

US poised to press Egypt over Iraq action

BYLINE: By JAMES DRUMMOND

SECTION: MIDDLE EAST & AFRICA ; Pg. 6

LENGTH: 425 words

DATELINE: CAIRO


US President George W. Bush is likely to use the parlous state of Egypt's
economy to ratchet up pressure on Hosni Mubarak, the Egyptian leader, to support
US policies in the Middle East when the two men meet in Washington tomorrow,
diplomats in Cairo said at the weekend.

A likely resumption of US hostilities against Iraq is likely to top the agenda
although it seems that Mr Mubarak has little room for manoeuvre on the issue.

Egyptians have little affection for Saddam Hussein, the Iraqi leader, but there
is widespread sympathy for the suffering of Iraqi civilians during the years of
US-led sanctions following the first Gulf war in 1991.

Dick Cheney, the US vice-president, is due in Egypt next week as part of an
international tour, which is viewed as paving the way for possible renewed
action against Baghdad.

Also on the agenda in Washington is likely to be the spiralling conflict between
Israel and the Palestinians.

Egypt has voiced support for the peace plan put forward by Crown Prince Abdullah
of Saudi Arabia to break the deadlock of 17 months of violence. But there is
little disguising the fact that Cairo has been a spectator during the latest
round of diplomatic activity.

Washington, however, is likely to expect Egypt to play its traditional
moderating role at an Arab summit in Beirut at the end of March, which will
examine the initiative, diplomats said.

As far as Mr Mubarak is concerned, Egypt currently finds itself in an unusually
weak position in negotiations with Washington.

With a floundering economy, Cairo currently needs all the financial support it
can find. A proposed fast-disbursing, compensatory financing facility from the
International Monetary Fund is making only slow progress, officials say.

Pressure on the Egyptian pound has eased with the end of the haj pilgrimage and
subsequent holiday period but widespread reports of difficulties in the payments
system persist.

Meanwhile, Muammer Gaddafi, the Libyan leader, has become the first Arab leader
to publicly oppose Prince Abdullah's plan. Mr Gaddafi, speaking on Saturday,
also threatened to leave the Arab League, the umbrella grouping of 22 countries
of the Arab world.

The latest outburst by the Libyan leader prompted Amr Moussa, the
secretary-general of the Arab League, to hurry to Libya yesterday to placate Mr
Gadaffi.

Bashar al-Assad, the Syrian president, who was paying his first official visit
to Lebanon yesterday, also implicitly played down the Saudi initiative by
stressing the right of Palestinian refugees to return to their homes.

LOAD-DATE: March 3, 2002

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                        Financial Times (London,England)

                              March 4, 2002 Monday
                                 USA Edition 1

Libyan agency invests in Fiat NEWS DIGEST

BYLINE: By FRED KAPNER

SECTION: COMPANIES & FINANCE INTERNATIONAL ; Pg. 18

LENGTH: 224 words

DATELINE: MILAN


Libyan agency invests in Fiat

Sixteen years after the US forced Giovanni Agnelli, Fiat chairman, to get rid of
Libya's foreign investment agency as one of the industrial group's main
investors, the agency is back. Libyan Arab Foreign Investment Co (Lafico)
recently acquired 2.3 per cent of the Italian car, truck and engineering group's
stock, Italian stock market regulator Consob said.

The investment, through purchases on the open market, came as Fiat's shares hit
a 10-year low last week. It also comes after Lafico acquired 5.3 per cent of
Juventus, the Agnelli-owned football club that had an initial public offering in
December. Lafico also owns 5 per cent of Banca di Roma, one of Italy's largest
banks in which Toro, the Fiat-owned insurance company, owns 10 per cent.

Lafico bought 15 per cent of Fiat in 1976 when the group was in dire need of
cash. US threats to bar Fiat from bidding on government contracts eventually led
the company to find other investors who bought out the Libyan agency at a costly
premium in 1986.

Mr Agnelli, now honorary chairman of the company founded by his grandfather,
said the purchase by Lafico "indicates that its relationship with the Americans
has changed", adding that Libyans had "demonstrated a desire to distance
themselves from certain forms of dangerous radicalism". Fred Kapner, Milan

LOAD-DATE: March 3, 2002

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                        Financial Times (London,England)

                            February 22, 2002 Friday
                                London Edition 1

Pariah nations ponder changing their ways: 'Rogue' states, particularly Iraq,
are braced for the next phase of the US war on terrorism, and strategic concerns
are leading some to show readiness to change their behaviour, writes Roula
Khalaf

BYLINE: By ROULA KHALAF

SECTION: THE AMERICAS ; Pg. 7

LENGTH: 980 words


As theUS bombardmentof Afghanistan reached a climax in December and the Taliban
regime was swept aside, a different kind of offensive was under preparation in
another troubled region more than 2,000 miles away.

By January in Baghdad, Saddam Hussein, the Iraqi leader and long-time enemy of
the US, was dispatching his diplomats to Arab capitals with soothing words of
reconciliation. In public statements too, he hinted at Iraq's willingness to
compromise and strike a deal with Kuwait and Saudi Arabia, to resolve lingering
resentments from the Gulf war.

The charm offensive, noted Arab officials, was a typical manoeuvre by a master
of political survival, who had wrongly calculated that the US campaign in
Afghanistan would turn into a political quagmire for Washington. Instead, Mr
Saddam realised, he faced the prospect of being Washington's next target, now US
military strength had been proved capable of forcefully and swiftly toppling the
Taliban.

"The lessons learned from Afghanistan are primarily about the US's ability to
bring about a regime change," says a western diplomat. "Inevitably parallels
were immediately drawn in Washington between the Northern Alliance and the Iraqi
opposition, even if they don't hold up analytically."

The display of US military power in Afghanistan promises to alter the nature of
the stand-off between the US and the countries it labels as "rogue" states.

Analysts predict, however, that the impulse for a radical change in behaviour
will be greater among the second category of pariah states - countries such as
Yemen, Sudan and Libya - than in the more hardline Iraq, Iran and North Korea,
now the focus of President George W. Bush's "axis of evil".

Despite Mr Saddam's overtures and the possibility of more room for compromise,
Arab officials say he is unlikely to satisfy the tough US demands, which include
providing unfettered access to intrusive United Nations weapons inspectors,
without the promise of an immediate lifting of the UN embargo.

Meanwhile, the attitudes of leaders in Sudan, Libya and Yemen have already
changed. The threat of US military force alone drove the leaderships of the
three countries to declare their support for the US-led anti-terror campaign.

The shift in Libya, which suffered US military strikes in 1986, may be the most
impressive. Colonel Muammer Gadaffi has taken full advantage of the current
climate and rushed to share intelligence information with Washington in the hope
that this will pave the way for a resumption of diplomatic relations with the
US.

In Yemen, where US investigators had long complained of a lack of sufficient
co-operation on terrorism, the government has now made the strategic decision to
back the US, removing the country from the list of potential military targets.

Analysts, however, say Mr Bush stepped up pressure on the most dangerous states
- Iraq, Iran and North Korea - in his "axis of evil" speech because the
Afghanistan victory alone was not a sufficient deterrent for countries
apparently determined to acquire weapons of mass destruction.

"Afghanistan reveals the resolve on the part of the Bush administration to
commit military force and power but the problem is that you cannot rely on
audacious military victory in Afghanistan to deter states inclined to counter US
power," says Jonathan Stevenson, editor of the Strategic Survey, a publication
of the International Institute for Strategic Studies in London.

Europe, which has been a strategic partner in the US anti-terror campaign, has
been dismayed by Washington's toughening approach. European officials argue that
instead of bolstering US deterrence, hardline policies shut the door to
political dialogue, emboldening extremists in Iran and undermining South Korea's
opening towards the North.

"The show of force might increase the resentment of the US in these (rogue)
states, and raise the incentive of these states to empower themselves against
it. It might drive them further underground," says Mr Stevenson.

Geoffrey Kemp, director of regional strategic programmes at the Nixon Center in
Washington, notes some countries are more vulnerable to intimidation than Iraq
and Iran. "Iran is too big and bloody-minded, and in the short term what you
might do is accelerate the opening between Iraq and Iran," he says.

From a military perspective, the US could easily target Iran's nuclear reactors.
But the political fall-out would be costly. As to Iraq, despite a seemingly
growing momentum for applying the Afghanistan model, the US is proceeding with
caution and damping expectations of an imminent strike.

"There are some people in this town who think we should've moved directly to
Baghdad and taken the region by surprise. But even the hawks are now arguing we
can't afford to fail and we have to do it thoroughly," says a Washington policy
analyst. "So the rhetoric of

'Show of force might drive them underground' the president's speech is being
balanced by some hard-nosed military checks, which the military is forcing on
the debate."

As the euphoria of the Afghanistan victory fades, the challenges of a campaign
against Iraq become more apparent. Would airstrikes be used to promote upheavals
on the ground or provoke a coup against Mr Saddam, for example, or would the US
be forced to invade?

Iraq's army has been severely weakened since the Gulf war but it still counts
375,000 men, with well-equipped units of the Republican Guards and Special
Republican Guards loyal to Mr Saddam. The Iraqi opposition - the Kurds in the
north and the Shias in the south - are not as well trained as Afghanistan's
Northern Alliance. "With a little bit of distance, people are now realising that
it's a big mistake to extract too many lessons from Afghanistan and apply them
elsewhere," says Mr Stevenson. This is the final story in a series. See previous
articles on: www.ft.com/usmilitary

LOAD-DATE: February 21, 2002

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                        Financial Times (London,England)

                          February 20, 2002 Wednesday
                                 USA Edition 2

Clear policy is a good start

BYLINE: By JOHN A ADAMS

SECTION: LETTERS TO THE EDITOR ; Pg. 14

LENGTH: 265 words


From Mr John A. Adams Jr.

Sir, I have read with some interest your recent columns on the "axis of evil"
uproar that seems to concern some in the European community.

I find it most intriguing that many express surprise at US will and leadership.
It is about time.

Given the lost decade of the 1990s, when no firm American policy toward
terrorist acts was articulated after nearly a score of major incidents, many are
pleased that measures were taken by President George W. Bush to draw a line in
the sand on such dastardly terrorist activities. Thus it is refreshing to know
we now have a president and secretary of state with a clear message.

Terrorism will not be tolerated. This in no way means some instant stoppage of
such acts - but a clear policy is a good start. And, the US's clear statement
and response to terror should comfort Christopher Patten concerning his comments
on friends and sycophants!

Last, the support from our allies in Europe is paramount. However, in the case
of terrorist acts, and to respond to those who have vowed to kill us, action
should be swift, timely and as complete as possible. This has not always been
the case. I remember some years ago, when clear terrorist targets were
identified in Libya and the US was delayed for days as France refused
over-flight of our F-111s from England, all the while information was leaked to
the terrorists, who moved their training camps.

Thus, do not be perplexed by the US's direct leadership but instead be pleased
that there are those who are willing to act accordingly.

John A. Adams Jr, Laredo, TX 78044, US

LOAD-DATE: February 20, 2002

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                        Financial Times (London,England)

                           February 14, 2002 Thursday
                                London Edition 1

From Blue Spoon to a Just Cause: MILITARY BRANDING: Without industry's
resources, the US has yet to perfect the art of naming wartime operations,
writes Richard Tomkins:

BYLINE: By RICHARD TOMKINS

SECTION: INSIDE TRACK ; Pg. 13

LENGTH: 1201 words


As Lt Col Gregory Sieminski tells it, the US was on the point of invading Panama
in 1989 when Lt Gen Thomas Kelly, operations officer on the joint staff,
received a call from Gen James Lindsay, commander-in-chief of Special Operations
Command.

The general, it turned out, wanted something changed: not the invasion plan but
the seemingly insignificant detail of its name. "Do you want your grandchildren
to say you were in Blue Spoon?" he asked.

The general had a point, Lt Gen Kelly conceded: the name was a little
uninspiring. After hanging up the phone, he turned to his deputy. "How about
Just Action?" he suggested. "How about Just Cause?" his deputy shot back. And so
was born the fashion for branding military campaigns.

Since 1989, public relations has played an important role in the naming of big
US operations. Yet the naming of the campaign launched by the US after September
11 shows that the military has some way to go before perfecting the art.

After initially naming the operation Infinite Justice, the US Department of
Defence was quickly forced into an embarrassing change after the Council on
American-Islamic Relations complained that infinite justice was something only
God could dispense. The new name, Enduring Freedom, has survived; but it sounds
too propagandistic for comfort and lacks the spine-tingling panache of a Rolling
Thunder or a Desert Storm.

The definitive history of the naming of military operations was written by Lt
Col Sieminski in the autumn 1995 edition of Parameters, the US Army War College
magazine. He tells how it started in the first world war when the Germans began
giving code names such as Mars and Achilles to campaigns, mainly to preserve
operational security.

In the second world war, the US and Britain trawled the English dictionary to
come up with thousands of potential code names that were randomly applied to
operations. But Winston Churchill, the British prime minister, was fond of
overriding the system with his own preferences: it was he who insisted that the
1944 Normandy invasion, originally dubbed Roundhammer, should be renamed
Overlord, creating the best-known campaign name of the war.

Churchill was so fascinated with code names that he set out a list of guidelines
for inventing them. Names should not "imply a boastful or over-confident
sentiment", he said, or, conversely, have "an air of despondency"; they should
not be names of living people; and they should not be frivolous. No mother, he
decreed, should have "to say that her son was killed in an operation called
Bunnyhug or Ballyhoo".

Churchill's efforts notwithstanding, second world war operation names had little
effect on shaping public attitudes because they were classified until the war
had ended. This started to change only with the outbreak of the Korean war, when
General Douglas MacArthur decided to declassify names once operations had begun.

Mostly, these were meaningless code names. But in the Korean and Vietnam wars,
the US military more than once stirred controversy by adopting particularly
aggressive names such as Operation Killer (Korea) and Operation Masher
(Vietnam). In 1975, this resulted in the introduction of US guidelines that are
still in force today.

Noting that poorly chosen names can be "counter-productive", the guidelines say
names must not "express a degree of bellicosity inconsistent with traditional
American ideals or current foreign policy", be "offensive to good taste or
derogatory to a particular group, sect or creed", be "offensive to (US) allies
or other Free World nations" or employ "exotic words, trite expressions or well
known commercial trademarks".

In the first 14 years after the introduction of these rules, most names chosen
were meaningless word pairs such as Eldorado Canyon, used for the 1986 raid on
Libya. But in 1989, Just Cause opened the US military's eyes to the possibility
of using names to shape public perceptions.

Since then, the public relations effort has been a hit-and-miss affair. As Lt
Col Sieminski points out, Just Cause itself was flawed, insisting as it did on
the mission's morality.

"However righteous an operation might appear to be, a name like Just Cause can
be distasteful to the media and general public, not necessarily because they
disagree with the justness of the cause but because they resent having such
words put . ..in their mouths," Lt Col Sieminski wrote.

More prudent names, he suggested, reinforced policy objectives by emphasising
the mission and its rationale - and the best ones achieved this with a memorable
metaphor. Desert Storm did this so successfully that it became synonymous with
the Gulf war.

Last month S. B. Master, founder and president of Master-McNeil, a US brand
consultant, took Lt Col Sieminski's work further by analysing what made the best
names work. In an article in Admap, an advertising industry magazine, she
concluded that tone, sound, rhythm and length were essential ingredients.

Many names - such as Noble Obelisk or Productive Effort - failed to work, she
said, because they "just sounded wrong": they were too long, adopted the wrong
tone ("too wimpy or too bellicose"), lacked a pleasing rhythm or employed a
displeasing succession of letter sounds.

A feature of the most successful names on her list was their metre or rhythm.
Most, such as Desert Storm and Shining Hope, employed a short-short-long pattern
known as the anapaest (although, confusingly, a classicist would view these as
long-short-long, or cretics). The next most common pattern, as in Able Sentry
and Distant Runner, employed a pair of short-short pyrrhics (although a
classicist would call them long-short trochees).

"There is clearly something about the energy and motion of the first two
syllables, combined with the finality and strength of the final long syllable,
that makes the anapaest form particularly appropriate and satisfying for
campaign names," Ms Master said.

Another characteristic of the successful names was the adjective-noun
construction: a direct, vivid adjective such as "quick", "early", "desert" or
"bright", followed by a punchy noun such as "hope", "flash", "strike" or
"storm". The best of these nouns also functioned as verbs, giving the names an
appealing tone of determined action.

By most measures, Enduring Freedom fails as a name. The length and rhythm are
both wrong and its tone falls into the same trap as Just Cause, sounding overly
moralistic and self-righteous.

Why does the US military continue to make such bad choices? In its defence, Ms
Master says it has to think up these names in a great hurry and does not have
the luxury of the private sector's financial resources, access to market
research and so on. "And the people who do this are not professional namers.
It's not their full-time job - and it's not easy to get it right."

Based on her own research, Ms Master concludes that a better name for Enduring
Freedom - one with two words, three syllables, anapaest metre and a vivid
adjective followed by a punchy noun that also functions as a verb - would have
been Freedom Ring: which perhaps serves to demonstrate that it is easier to
criticise other people's names than to come up with a good one of your own.

LOAD-DATE: February 13, 2002

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                        Financial Times (London,England)

                           February 14, 2002 Thursday
                                London Edition 2

Iran's bid to join WTO is blocked by US

BYLINE: By FRANCES WILLIAMS

SECTION: INTERNATIONAL ECONOMY & LATIN AMERICA ; Pg. 9

LENGTH: 321 words

DATELINE: GENEVA


The US, backed by Israel, yesterday again blocked Iran's application to join the
World Trade Organisation, further underscoring the divide between Washington and
its European allies, which favour strengthening economic and trade relations
with Tehran.

Iran first applied to open WTO membership talks in 1996. But under the WTO's
system of consensus decision-making the US managed to prevent the request even
coming up for discussion until May last year, when developing countries insisted
it be put on the agenda of the WTO's ruling general council.

At that time there were hopes that a US review of relations with Iran might lead
Washington to allow the establishment of a WTO working party to negotiate Iran's
terms of entry. But though US officials told the general council yesterday that
the review was continuing, any such hopes have now been dashed by Iran's
inclusion, alongside Iraq and North Korea, in US President George W. Bush's
"axis of evil".

"That was the kiss of death for Iran's WTO application," said a European
diplomat. "There's no possibility from the US standpoint that it could take any
positive step even in the medium term."

Washington has also privately served notice that it will continue to block
recent requests for WTO membership from Syria and Libya.

The European Union has said it supports Iran's wish to join the WTO, though
member states are split on how far to go in openly criticising the US position.
Brussels plans to press ahead with a trade deal with Tehran, which it sees as
encouraging economic and social reform in the country, and is backing WTO
membership for others in the region including Syria and Libya.

The EU also is negotiating an association accord with Syria as part of ambitious
plans to create a Europe-Mediterranean free trade area by 2010.

Washington's objections to Syria and Libya are said to concern their support for
the Arab League's trade boycott of Israel.

LOAD-DATE: February 13, 2002

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                        Financial Times (London,England)

                            February 8, 2002 Friday
                                London Edition 2

Korean border starts to look 'scary' again

BYLINE: By ANDREW WARD

SECTION: ASIA-PACIFIC ; Pg. 8

LENGTH: 806 words

DATELINE: SEOUL


President George W. Bush's inclusion of North Korea in an "axis of evil" that
threatens the US has thrust the secretive north-east Asian state, known as the
Hermit Kingdom, into the international spotlight and widened the parameters of
the war against terror.

By including Kim Jong-il's communist regime in the list of potential future
targets, Mr Bush signalled that the war against terror was not limited to
Islamic terrorists and their backers but could be widened to any country that
threatened the US with weapons of mass destruction.

With enough plutonium for at least one and possibly two nuclear weapons, an
estimated 5,000 tonnes of biochemical weapons and missiles that could soon be
capable of hitting the US, North Korea fits the widened criteria of Mr Bush's
war.

But Seoul is lobbying the US to tone down its rhetoric ahead of Mr Bush's visit
to South Korea on February 20. It fears that Washington's tough approach
threatens the stability that has settled on the divided peninsula in recent
years and fails to recognise progress achieved through South Korean President
Kim Dae-jung's "sunshine" policy of engagement with its hostile neighbour.

Although North Korea is listed by the US as a terrorist-sponsoring nation
following a spate of overseas bombings in the 1980s, it has kept its hands clean
recently. Pyongyang condemned the September 11 attacks and signed two
international anti-terrorism treaties last year.

Despite the country's nuclear capabilities, it has frozen production of
weapons-grade plutonium and stopped test-firing ballistic missiles in return for
construction of two power stations funded by the US and its allies.

While Mr Kim's military regime continues to suppress its impoverished people and
maintain its barriers against the capitalist world, there are signs of change:
all except two European Union nations have diplomatic ties with Pyongyang,
foreign tourists have been invited to attend a festival in the country this
spring and inter-Korean dialogue, although faltering, has reduced tension on the
peninsula.

"In terms of current evil, North Korea ranks considerably lower than the other
two in this axis," says Robert Einhorn, who negotiated with Pyongyang as
president Bill Clinton's assistant secretary for nonproliferation.

Analysts say North Korea's inclusion in the "axis of evil" helps Washington
argue that the war against terror is not a war against Islam. Mr Bush needs to
highlight the threat posed by Pyongyang to justify his planned national missile
defence shield because North Korea is the only rogue state with the near-term
potential to launch an intercontinental missile.

However, while it may be in Mr Bush's political interests to emphasise the
direct threat posed by North Korea,

Washington's most pressing concern is Pyongyang's thriving missile export
business. Defence analysts name Iran, Pakistan, Egypt, Syria and Libya as
customers.

"If there is one North Korean activity that can be considered roguish, it is its
export of missiles," says Mr Einhorn. "They are the world's number one
proliferator of missile technology and they sell without discrimination to
anyone that will pay the money."

But if proliferation is the most compelling reason for North Korea's inclusion
in the "axis of evil", it is unclear what Mr Bush plans to do about it.

"We're not dealing with an Iraq situation where the US could move in 2,000
troops and defeat Iraq with impunity," says Mr Einhorn. "North Korea has a lot
of artillery along the border that could reach Seoul. That's why they are so
dangerous because they can threaten to kill hundreds of thousands of people with
credibility."

Washington has a number of non-military options. Arms shipments from North Korea
to the Middle East could be intercepted; aid could be cut; and construction of
the two power plants pledged as part of the 1994 arms control deal could be
halted. All three actions would further damage North Korea's disintegrating
economy, though. Some analysts fear that North Korea could lash out if backed
into a corner by the US.

"The concern is that here is a country we do not understand, which has done some
unpredictable things in the past and has its hands on some nasty technology,"
says David Smith, arms control specialist at the Centre for Strategic and
International Studies in Washington. "If they know they are going down, are they
going to go down fighting?"

With little prospect of Mr Kim being overthrown from within and the military
option unappealing, negotiation still appears the most fruitful method of
bringing about change.

But the 49-year-old border that separates the two Koreas along the 38th
parallel, where enemy soldiers glower at each other across a 4km-wide
demilitarised zone, once again looks like, in Mr Clinton's words, "the most
scary place on earth". www.ft.com/terror

LOAD-DATE: February 7, 2002

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                        Financial Times (London,England)

                           February 6, 2002 Wednesday
                                London Edition 2

Enterprise outlines strategy OIL & GAS GROUP HOPES REFOCUS WILL HELP IT REMAIN
INDEPENDENT:

BYLINE: By DAVID BUCHAN

SECTION: COMPANIES & FINANCE UK AND IRELAND ; Pg. 20

LENGTH: 570 words


Sam Laidlaw, Enterprise Oil's new chief executive, yesterday announced cost
cuts, a refocus of its exploration efforts and higher output targets in a
strategy to keep his embattled company independent.

In a sign of his activist style, Mr Laidlaw announced a series of deals to
increase Enterprise's stakes in the North Sea, Brazil and Russia. He signalled
the company's probable pull-out from Iran, but likely entry into north Africa.

He also said a reduction in the workforce at the company's London headquarters
from 300 to 200 would save Pounds 20m, with another Pounds 10m savings coming
from elsewhere in the business.

The recent takeover approach from Eni of Italy had been "useful", Mr Laidlaw
said, because it helped galvanise the company.

Some shareholders complained that Enterprise had rejected Eni's approach without
informing them, but Mr Laidlaw promised that "if someone were to come along with
a full offer - and we've not had one - which reflects the full value of the
company, the board would take it seriously".

The strategy presentation coincided with disclosure of Enterprise's 2001
results. This showed post-tax profits falling from Pounds 407.4m in 2000 to
Pounds 274.4m, struck after a Pounds 32.9m exceptional cost to settle a rig
dispute.

This was in line with expectations and came on the back of lower oil prices and
a 14 per cent drop in production to 243,000 barrels of oil equivalent a day
(boed).

Promising that he would raise production back up to 260,000 boed by the end of
2002, Mr Laidlaw set a target to lift output by 7 per cent a year over the
medium term.

Iain Reid of UBS Warburg said Mr Laidlaw had "turned a negative into a positive"
by using a lower base to set a higher target. But this year's output would still
be lower than what Enterprise produced in 2000.

Mr Laidlaw said he planned to centralise exploration around a new director with
the aim of finding more oil and gas with less money.

Less capital would be allocated to "high risk, long-cycle deepwater projects"
and more to "proven plays, including rehabilitation projects" such as those that
Enterprise was seeking in Libya and Algeria.

Mr Laidlaw also said he had used his three months at Enterprise to concentrate
investment in some areas. The company had bought Odebrecht's Brazilian assets
for Dollars 153m (Pounds 105m) to give it 80 per cent of the Bijupira Salema
field, which it also operates. For Pounds 23m and an asset swap, it had
increased its stake in the UK's Pierce field to 92.5 per cent. And in Russia, it
had paid Pounds 20m to raise its stake in KMOC from 27 to 46 per cent.

Enterprise may cut its losses in Iran where it has so far invested Dollars 9m in
part of the South Pars gas project. In addition to buy-back contracts that limit
foreign companies' profitability, Mr Laidlaw said South Pars suffered from
commercial complexity and construction cost overruns, and required "a radical
rethink".

He gave some higher reserve estimates for Enterprise's interests in the North
Sea and Italy, which he said were "not fully in the market".

In an innovative deal, Enterprise has signed up Innogy, the UK utility, to take
most of its uncommitted UK, Norwegian and Irish gas for an initial three years.
Enterprise plans to increase the share of gas in its output from 15 to 25 per
cent by 2004, and believes the deal will help it sell more Norwegian gas into
the UK. Observer, Page 17 Lex, Page 18

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                        Financial Times (London,England)

                           February 2, 2002 Saturday
                                London Edition 1

Juventus' top-league brand should meet investor goals

BYLINE: By FRANCO BENOFFI-GAMBAROVA

SECTION: LETTERS TO THE EDITOR ; Pg. 8

LENGTH: 276 words


From Mr Franco Benoffi-Gambarova.

Sir, I refer to Simon Kuper's article "Irrational exuberance in the directors'
box" (FT Weekend January 26-27). I certainly admit "the irrational exuberance"
of the values gained in the recent past by the shares of soccer teams - probably
a herd effect.

Nevertheless, I disagree with Mr Kuper when he generalises and applies his
considerations to different cases, including that of the recently floated
Juventus of Italy. In the case of Juventus - which perhaps I know more about
than Mr Kuper for the simple reason that I live in Italy - we should recognise
that, first, in Italy the team has developed into a universal brand. It is loved
and has supporters from the north to the south of the country.

Second, appropriate use of the brand name, as designed in the strategic plan of
the company, should reasonably put Juventus in the class of an overall
entertainment company. I am not saying this business model is new, but I would
emphasise that the specific circumstances in this case should make it
successful. And the balance sheets of the past three years demonstrate that a
soccer club can generate profits, provided that soccer is not its only activity.

Third, Juventus has a real expertise in professional management and it should be
able to sell this know-how to newly developed countries.

Fourth, as far as Libya is concerned, Al-Saadi Gadaffi is correct when he says
that sport is important to his country. He was very clever when he decided to
invest in Juventus, and will certainly benefit in terms of total shareholder
return and in other ways.

Franco Benoffi-Gambarova, Via Aspromonte 52, Lecco, Italy

LOAD-DATE: February 1, 2002

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                        Financial Times (London,England)

                           February 2, 2002 Saturday
                       London Edition 1 20020202W112.905

The safari jacket

BYLINE: By NICHOLAS FOULKES

SECTION: HOW TO SPEND IT ; Pg. 12

LENGTH: 1126 words



CLASSIC LINES NICHOLAS FOULKES

Doubtless debate will rage for decades before posterity agrees upon Yves Saint
Laurent's finest achievement. But I have already made up my mind. I came to my
conclusion long before his valedictory show where, surrounded by muses and
gorgeous girls, he wallowed in the plaudits of a devoted public and an almost
unanimously adoring press.

Had dear old Yves hung up his tape measure and switched off his sewing machine
during the early 1970s, he would still have accomplished his greatest work: the
immortalisation of the safari jacket.

In May 1969, a photograph taken by Helmut Newton showed the epicene designer,
his face surrounded by a halo of blow-dried hair, with his arm draped around the
shoulder of his sister. Both were wearing almost interchangeable safari suits:
his was olive, hers white; his buttoned at the front, hers laced up. Together,
they epitomised the unisex spirit of the age.

In a way, Saint Laurent's safari jacket was even more daring than his "Le
Smoking" look of the mid-1960s. That was an exercise to show that trousers on
women could be sexy, not just Sapphic. The safari suit was a masterstroke,
taking one of the most butch, overtly macho garments in the sartorial pantheon
and commandeering it as the uniform for his generation.

Had Papa Hemingway not committed suicide by then, I am sure the knowledge that
an effete, overtly homosexual dress designer had remade his signature garment
into the chosen clothing of a decadently androgynous era, would have been
sufficient to push him over the edge.

"It appears that they developed out of military tropical uniforms," says Roger
Mitchell, of gunsmith Holland and Holland, about the murky genesis of the safari
jacket in Africa during the early 1900s. The evolutionary course of this garment
becomes plain when looking at photographs taken during the German East Africa
campaign in the first world war. One, taken in August 1917 of Donald Seth-Smith,
father of big-game hunter Tony Seth-Smith, shows him in a uniform, which, but
for the Sam Brown belt and the highly polished metal buttons, is almost
identical to a safari jacket right down to the big, baggy bellows pockets for
holding a fistful of ammunition or binoculars.

According to Mitchell, such uniforms "were made out of spinnaker sail cloth" and
it is from this fabric that "Spinker Drill, a very dense cotton" used in the
making of safari jackets, has evolved. It is sturdy enough to survive life in
the wild - and the robust attentions of a camp laundress who either boiled
washing in a pot or beat it against a stone on the river bed - yet light enough
to be worn in the equatorial heat.

But if the hunters of the Happy Valley days after the first world war were
content to adapt army tunics to suit the requirements of life in the bush,
Hemingway was after something more befitting to the most manly of men of
letters. He turned to sporting goods emporium Abercrombie & Fitch.

In its day, Abercrombie & Fitch was a remarkable temple to the outdoor life, in
the middle of Manhattan: a place where you could buy a trampoline for exercising
your dog, a hot-air balloon, a set of throwing knives or a suit of chainmail. A
log cabin on the roof of the 12-storey building it occupied on Madison Avenue
served as the townhouse of co-founder

Ezra Fitch. Next to that cabin was a casting pool for fishermen and, in the
basement, an armoured rifle range.

The place might have been built for Hemingway. Certainly, safari jacket No 476
incorporated a special touch requested by Papa: a pocket on the sleeve, which,
depending on the story you choose to believe, hold a packet of cigarettes or a
pair of spectacles.

The safari jacket became shorthand for a kind of overt uncompromising and
uncompromised masculinity: John Huston wore one on the set of The Misfits. But
by far the most memorable cinematic outing for the safari jacket was the 1953
melodrama Mogambo in which Clark Gable dominated the screen with just a rifle
and an impeccably cut safari jacket.

However, if Hemingwayesque he-men and their safari jackets came to epitomise the
Mogambo machismo of the big-game-hunting years, Yves Saint Laurent's
reinterpretation threw it open to the fashion crowd. A hybrid of the safari suit
even wound up as official dress in the upper echelons of Zairean Society during
the Rumble in the Jungle years of the 1970s.

In his 1975 essay "A New King for the Congo: Mobutu and the Nihilism of Africa",
V.S. Naipaul describes the change that came over Mobutu's wardrobe. "As General
Mobutu, he used to be photographed in army uniform. Now, as Mobutu Sese Seko, he
wears what he has made, by his example, the Zairois court costume. It is a
stylish - bear in mind this was mid-Seventies Africa - version of the standard
two-piece suit. The jacket has high, wide lapels and is buttoned all the way
down; the sleeves can be long or short. A boldly patterned cravat replaces the
tie, which has more or - less been outlawed."

In establishing such a fashion-conscious form of court dress for the ruling and
official classes, Mobutu might well have been influenced by the designs of
Italian fashion house Brioni, which had already submitted an entry for a
competition to create a national costume for Libya, in 1974.

As the African safari gave way to the African civil war, the safari jacket
acquired its identity: as a pillar of the 1970s unisex wardrobe and a key
component of third world dictator chic. By the mid-1970s, Brioni was just one
brand creating all manner of long- and short-sleeved versions of the safari
jacket as quite formal "Classico-Ethnico" wear. Soon, the safari jacket was a
chameleon garment, adopted as everyday wear by characters as diverse as Roger
Moore's James Bond, and the Studio 54 set's couturier of choice, Halston.

The era of epic safaris on which lions and elephants were slaughtered with a
wantonness suggesting they were looked upon as vermin belongs to a past age, but
the hunter's garment of choice has remained a fashion classic, revivified over
the years by everyone from Turnbull & Asser to Ralph Lauren, and the
merchandising department of Land Rover.

INFORMATION

Abercrombie & Fitch, 199 Water Street, New York (+ 212-809 9000).
www.abercrombieandfitch.com

Holland & Holland, 31-33 Bruton Street, London W1 (020-7499 4411).

Land Rover Gear, in the UK: 01206-216900, www.thegearshop.co.uk; in the US:
1-888 GEAR 4WD.

www.landrovergear.com

Turnbull & Asser, in the UK; 71&72 Jermyn Street, London SW1 (020-7898 3000): in
the US: 42 East 57th Street, New York (+1 212-752 5700);
www.turnbullandasser.com

Tom Ford for Yves Saint Laurent Rive Gauche, in the UK: 137 New Bond Street,
London W1 (020-74931800); in the US: 855 Madison Avenue, New York (+1 212-988
3821).


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                        Financial Times (London,England)

                           January 31, 2002 Thursday
                                London Edition 3

BP goes for Veba petrol stations deal OIL & GAS GROUP WILL ALSO CLINCH SALE OF
VEBA ASSETS TO PETRO-CANADA:

BYLINE: By DAVID BUCHAN, VIRGINIA MARSH and KEN WARN

SECTION: COMPANIES & FINANCE UK AND IRELAND ; Pg. 24

LENGTH: 470 words

DATELINE: LONDON, TORONTO and SYDNEY


BP, the oil major, yesterday announced it would carry through its deal with Eon
to buy Veba petrol stations in Germany, while at the same time clinching a
Dollars 2bn (Pounds 1.3bn) sale of Veba assets to Petro-Canada.

The deal with Eon, the German utility, had been thrown into some doubt by German
competition regulators' recent refusal to allow Eon to take BP's quarter share
in Ruhrgas as part payment.

But BP said yesterday it would instead pay Dollars 2.1bn in cash. However, it
added that if the German government overruled its own regulators' ban BP would
be ready to sell its Ruhrgas stake to Eon for the same price.

Veba's upstream assets are situated mainly in the North Sea, Libya and
Venezuela.

They will give Petro-Canada, the former government-owned integrated oil company,
an international dimension and increase its proven reserves by 70 per cent to
more than 1.4bn barrels of oil equivalent.

"We seized a rare opportunity to seize a business of superb quality," said Ron
Brenneman, Petro-Canada's chief executive.

Veba's upstream operations, largely run from London though headquartered in
Germany, produce 175,000 barrels of oil equivalent a day. Petro-Canada hopes to
double this output over the next five years.

Its deal may signal a more aggressive attitude by Canada's remaining energy
companies, many of whom have recently fallen to US buyers.

BP will get Dollars 1.65bn of the Veba asset proceeds, which will defray much of
the cost of the Dollars 2.48bn it will pay Eon to gain 51 per cent of Eon's Veba
subsidiary tomorrow. It will pay Dollars 2.4bn for the remaining 49 per cent in
April. But some of that price will be defrayed by proceeds from some petrol
station and petrochemical disposals BP has been forced to make by competition
regulators.

These disposals will still leave BP with a 22.5 per cent share of the German
petrol retailing market. This will be just ahead of the 19 per cent share gained
recently by Shell, its rival oil leader, as the result of its own purchase of
DEA petrol stations from RWE, another big German utility.

The unsuccessful underbidders for the Veba upstream assets were Woodside
Petroleum of Australia and Enterprise Oil of the UK. Both wanted to increase
their size, but success for either could have proved controversial.

Woodside might have re-incurred the wrath of Royal Dutch/Shell, a 34 per cent
owner of the Australian company. Having failed to get Woodside to stick to its
own region, Shell last year launched a bid for Woodside, a move that was blocked
by the Australian government.

After rejecting a hostile takeover approach from Eni of Italy last year,
Enterprise is fighting to stay independent. Sam Laidlaw, Enterprise's new chief
executive, will next week outline a strategy in which he may have hoped a Veba
deal would figure prominently.

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                        Financial Times (London,England)

                           January 30, 2002 Wednesday
                                 USA Edition 2

Petro-Canada expands overseas

BYLINE: By KEN WARN

SECTION: COMPANIES & FINANCE THE AMERICAS ; Pg. 18

LENGTH: 371 words

DATELINE: TORONTO


Petro-Canada, the Canadian former state-owned integrated oil company, has agreed
to buy the international operations of Veba Oil & Gas for CDollars 3.2bn
(USDollars 2bn) in an ambitious push outside its mature domestic oil patch.

The deal will lift Petro-Canada's total proven reserves by 70 per cent to more
than 1.4bn barrels of oil equivalent.

The effective seller is BP, which is buying German-based Veba but disposing of
the company's upstream assets.

The deal will give Petro-Canada production and exploration assets concentrated
in three areas: the North Sea; North Africa; and northern Latin America.

The takeover will be accretive to earnings and cash flow and is expected to more
than double production over the next five years, Petro- Canada said.

"We seized a rare opportunity to acquire a business of superb quality," said Ron
Brenneman, Petro-Canada chief executive.

"For some time now we have been evaluating international prospects to complement
and build on our strong position in every major oil and gas play in Canada," he
added.

Petro-Canada's purchase of Veba comes days after PanCanadian Energy and Alberta
Energy agreed to merge, signalling a heightened pace of activity within the
Canadian oil patch.

The all-cash deal will be financed by a credit underwritten by the Royal Bank of
Canada and Deutsche Bank, while cash flow from the acquisition would help fund
further Canadian and international growth and pay down debt, the company said.

The acquisition comes just days after Petro-Canada reported record profits of
CDollars 904m for fiscal 2001 and signalled its intention to continue its
overseas expansion. The government of Canada retains a passively held 18 per
cent stake in Petro-Canada, which it has said it intends to sell in the long
term.

Veba's North Sea assets include interests in the Guillemot and Scott fields in
the UK, and in the Hanze field in the Netherlands.

In North Africa it has production and development acreage in Libya, where
Petro-Canada also acquired holdings last year, and production in Syria and
Egypt.

Veba also has an interest in the Cerro Negro integrated heavy oil development in
Venezuela and an interest in an offshore natural gas development in Trinidad.

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                        Financial Times (London,England)

                            January 28, 2002 Monday
                                London Edition 1

Karachalios joins Greek oil refiner PEOPLE

BYLINE: By KERIN HOPE and LISA WOOD - EDITOR

SECTION: PEOPLE ; Pg. 11

LENGTH: 323 words


Athamassios Karachalios has rejoined Hellenic Petroleum, the Greek
state-controlled oil refining group, as managing director almost a year after he
resigned as chief executive of Hellenic's subsidiary in Macedonia.

Karachalios, 49, takes over from Eleftherios Tzelles, who oversaw the group's
partial privatisation and launched its expansion into the Balkan region.
Tzelles, who served as chairman and managing director, steps down after a
dispute with the development ministry over the selection of a strategic investor
for Hellenic. The binding offers are due next month for a 23 per cent stake in
Hellenic. Russia's Lukoil, in partnership with Greece's Latsis Group, OMV of
Austria and Yukos of Russia are the shortlisted bidders. The strategic investor
would also have a role in managing the next stages in Hellenic's regional
expansion.

Karachalios, a chemical engineer, started his career at Hellenic, working on the
modernisation of its oil refinery outside Athens in the 1980s.

He moved to Meton-Etap, a private Greek contractor that carried out construction
projects in the Middle East, including Libya.

After economic sanctions were imposed against Col Muammer Gadaffi's regime, and
payments to foreign contractors were frozen, Karachalios negotiated the
settlement of debt owed to Meton in shipments of crude oil.

He rejoined Hellenic to spearhead its expansion into the Balkans following the
group's listing on the Athens Stock Exchange. After the acquisition of Okta, the
Macedonian oil refinery, he moved to Skopje as chief executive with a brief to
oversee its modernisation. He also negotiated a project under which Meton joined
forces with Hellenic to build a pipeline to carry crude oil from northern Greece
to the refinery in Skopje, due to be completed this year.

Karachalios will work closely with George Moraitis, a former agriculture
minister who was appointed Hellenic's chairman earlier this month. Kerin Hope

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                        Financial Times (London,England)

                           January 26, 2002 Saturday
                                London Edition 1

Irrational exuberance in the directors' box Simon Kuper. On the Game. Investing
in a sports club is an emotional act in both the US as Europe. The difference is
that in Europe owners lose money, while in the US, everybody else pays

BYLINE: By SIMON KUPER

SECTION: BACK PAGE - WEEKEND FT ; Pg. 22

LENGTH: 912 words


As an extremely lowly reporter on this newspaper, I used to write about UK
football clubs floating on the stock market. That was six years ago andfootball
was perceived for the first time to be big business.

This was a strictly theoretical discovery, like something in particle physics,
because almost all football clubs lost money. But their new owners talked
vaguely of a future in which millions of fans swathed in club gear would watch
their team on pay-per-view television.

"Look at America," owners would conclude vaguely. This impressed me. US sports
clubs were well known to be big and profitable companies, almost like Goldman
Sachs or General Electric. Six years on, British football clubs still make
losses. If you bought shares in some of the clubs I wrote about - Chelsea,
Newcastle or Aston Villa - you would now have lost about three-quarters of your
money.

Nor are football clubs any better run than before. Recently I asked for an
interview with the president of a club listed on the stock market. I was told to
send a fax. The club said it had not got the fax. I sent three to different
officials. None apparently arrived. A month later I was finally allowed to make
the request by e-mail. This is a fairly typical experience of dealing with a
British club.

Anyone who still believed in investing in football must have been perturbed
earlier this month when Al-Saadi Gadaffi did just that. The son of the Libyan
leader bought 5 per cent of Juventus, the recently floated Italian club.

Al-Saadi does not even pretend to be a rational economic actor. A fan of
Juventus, who has reportedly played for the Libyan national team, he said: "This
cannot be considered a financial deal. Libya believes in sport and in its youth
and Juventus will help us develop the enormous potential of our football."

If only all sports investors were so honest. If they said: "I want to waste
money buying a piece of a sports club. It makes me feel good," that would be
fair enough. Alternatively, as I argued last week, they could buy the club in a
bid to become president of a country. But instead they dress up their
"investment" as a brilliant financial strategy.

Investing in a sports club is folly because sport is ruled by emotion. People
are so attached to a club that they bid up its price beyond rational levels.
Then, after someone has overpaid for the club, fans and the press force him to
overspend to buy or keep players. The Texas Rangers baseball club recently
handed shortstop Alex Rodriguez a 10-year contract worth Dollars 25m annually,
or about a fifth of current Rangers' revenues. This will not prove a rational
investment.

Yet investing in US sport is still said to be a better idea than in Europe. It
is true that presumably rational companies such as Disney and AOL Time Warner
own American sports franchises. Many clubs make money - the Chicago Bulls
basketball club had operating profits of Dollars 51m last year - and their
owners make even more.

It has actually proved almost impossible to sell a US sports franchise for less
than you paid for it. Only the CBS television network has managed this trick,
buying the New York Yankees for Dollars 14m in 1964 and selling them nine years
later for Dollars 10m. Otherwise, prices have surged. The Bulls sold for Dollars
1.25m in 1966, for Dollars 16.4m in 1985, and are now valued at about Dollars
330m. Such rises are almost normal in American sport.

And yet they are irrational. Profit figures do not remotely justify these
prices. Last year, the average National Basketball Association franchise turned
an operating profit of just Dollars 5m, while Major League Baseball clubs
claimed to have lost Dollars 519m in all. This figure may be exaggerated -
baseball was pleading poverty to justify closing two clubs - but there is no way
the sport simply invented Dollars 500m in losses.

Many US sports clubs are horrible companies. Paying ever more to buy them is
what is known as a bubble, or a gift to one's local community. When Texas
entrepreneur Robert McNair spent Dollars 700m on an American football team for
Houston in 1999, it was described as "probably the single largest charitable
contribution anyone has ever made".

US clubs would be even worse off but for the taxpayer. This generous being spent
about Dollars 1bn a year throughout the 1990s on building stadiums for sports
franchises. No self-respecting American club pays for its own ground. Instead,
it locates itself in whichever city gives it a stadium on the most generous
terms.

Trying to justify this taxpayers' subsidy, some interested party invariably
produces a report estimating the vast economic benefit a stadium will bring the
region. This benefit does not exist. When a city gets a stadium, local people
spend money there. But they spend commensurately less in local shopping malls,
cinemas and the like.

In other words, Dollars 1bn a year is transferred almost directly from the
taxpayer to multi-millionaire athletes and billionaire owners. This subsidy
makes owning a US sports club look a relatively good deal, particularly as there
is always some greater fool, or vainer billionaire, eager to buy the club for
yet more money.

For media companies, buying a sports franchise may just make sense, since they
are, in effect, purchasing "content". Otherwise, investing in a sports club is
as irrational in the US as in Europe. There is one difference: in Europe the
money is lost by owners, in the US, everybody else pays.

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                        Financial Times (London,England)

                           January 24, 2002 Thursday
                                London Edition 1

Lockerbie bomber appeal opens

SECTION: SHORTS ; Pg. 1

LENGTH: 33 words


Lockerbie bomber appeal opens

Lawyers for the Libyan jailed for the Lockerbie bombing claimed they had
"significant" new evidence as they launched an appeal. Page 2; Gadaffi turns
westward, Page 10

LOAD-DATE: January 23, 2002

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                        Financial Times (London,England)

                           January 24, 2002 Thursday
                                London Edition 1

Gadaffi turns westward in search of a fresh image: September 11 gave Libya a
chance to show it was now on the same side as the anti-terrorism campaign,
writes Roula Khalaf

BYLINE: By ROULA KHALAF

SECTION: INTERNATIONAL ECONOMY, MIDDLE EAST & AFRICA ; Pg. 10

LENGTH: 715 words


As part of Libya's contrib-ution to the global anti-terrorism campaign, a
justice ministry website has posted the names and photographs of "wanted"
exiles. The screen flashes the Dollars 1m (Pounds 600,000) reward Tripoli is
willing to pay for information on them.

"Libjust.com" appears to be an attempt to capitalise on the post-September 11
mood and underline that Libya, most often forced to defend itself against
terrorism charges, is now on the side of those fighting extremism. But for Ashur
al-Shamis, one of the London-based dissidents sought by the Libyans, the wanted
list sets a dangerous precedent.

"I've been in opposition to the regime since 1979 and they've never described me
as a terrorist - until last month. Now I feel fully exposed to attacks," he
says.

Mr al-Shamis runs an anti-regime electronic newsletter that has outraged
officials in Tripoli. He admits that he once held sympathetic views about the
Libyan Islamic Fighting Group, an organisation that targeted Libyan security
forces in the 1990s but was crushed by the regime. The US says the group is
linked to Osama bin Laden, the alleged mastermind of the September 11 attacks.

But Libyan claims that Mr al-Shamis has ties to the Islamist organisation and
that he has been involved in financing violence do not appear to be taken
seriously by the UK government. Western officials say there is no evidence he
has been involved in terrorism.

"He's an Islamist and he's in opposition so the Libyans are upset by him," says
a western official. "They've decided they don't like him and they're using the
current security environment to have a go at him."

The September 11 tragedy has offered Libya a rare opportunity to highlight that
it has turned the page on its dark past. Colonel Muammer Gadaffi rushed to
condemn the attacks on the US and to offer Libyan assistance.

His claim that Libya has itself been the target of terrorism was bolstered by
the inclusion of the Islamic Fighting Group on the US list of banned
organisations, though little remains of the group.

Since September Tripoli has handed over to the US a list of people it says have
helped Mr bin Laden. Libya also claimed to have information about the Taliban,
with whom it has tried to negotiate in the past for the handover of Libyans who
have fought in Afghanistan.

Western officials say that, while the information was welcomed, it did not prove
of great use. "The helpfulness comes in the fact that the Libyans are not
opposed to the global campaign and to the war on Afghanistan," says an official.
Libya is hoping that joining the anti-terrorism war may accelerate its
rehabilitation and achieve the great prize sought by Col Gadaffi: a resumption
of diplomatic ties with the US.

Washington appears to recognise the improvement in Libyan behaviour as Col
Gadaffi turns his attention to developing a new image as a mediator in African
conflicts. Libya's inclusion on the US State Department list of states
sponsoring terrorism is open to review. But diplomats say a rapprochement
requires first a resolution of outstanding demands on the Lockerbie case.

Last year a court found Abdel Basset al-Megrahi, a Libyan intelligence agent,
guilty of the 1988 bombing of the Pan Am flight over the Scottish town of
Lockerbie. The Libyan's appeal began yesterday. If the verdict is confirmed,
Libya must accept responsibility for the act and pay compensation to families of
victims.

In meetings between US, British and Libyan officials American officials have
been seeking to persuade Tripoli to agree a compensation package before the end
of the appeal process, arguing that the outcome will not be favourable to the
Libyans.

People close to the discussions say that following September 11 Col Gadaffi may
be more amenable to an early resolution of Lockerbie and that he is considering
a deal. They also warn, however, that revolutionary zealots in Tripoli could
undermine the leader's efforts by actions such as the persecution of exiled
opponents.

"Gadaffi knows that September 11 presents an opportunity to move ahead on
relations with the US," says an expert on Libya. "But he should also know that
after September 11 Libya won't get a second chance if anyone there misbehaves."
www.ft.com/libya For regional reports, www.ft.com/mideastafrica

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                        Financial Times (London,England)

                           January 23, 2002 Wednesday
                                London Edition 1

Lockerbie appeal case unlikely to affect Libya's rehabilitation: The political
process may have outstripped legal proceedings in the 13-year-old affair, write
Ian Bickerton and Jean Eaglesham

BYLINE: By IAN BICKERTON and JEAN EAGLESHAM

SECTION: NATIONAL NEWS ; Pg. 3

LENGTH: 493 words


The appeal of the Libyan convicted of the Lockerbie bombing starts today, amid
indications that the political process surrounding the 13- year-old case may
have outstripped the legal one.

The gradual rehabilitation of Libya from its pariah, terrorist status appears
likely to continue, even if Abdel Basset Ali Mohammed al-Megrahi wins his
appeal.

The UK, US and Libya are in negotiations about lifting the US and United Nations
sanctions imposed on Libya after the Lockerbie bombing. The latest talks were
held in London earlier this month and further meetings are scheduled.

The US and UN have said that the sanctions will remain until Libya accepts
responsibility for the 1988 bombing and agrees to pay compensation to the
families of the 270 people killed when Pan Am Flight 103 exploded above the
Scottish town.

Success for Mr al-Megrahi - who was jailed for life a year ago by Scottish
judges sitting at a special court in Zeist, in the Netherlands - would be
embarrassing for the US and the UK.

It would mean no one had been convicted for a crime long laid at Libya's door by
the west.

The legal grounds for the appeal - likely to last up to six weeks - have not
been disclosed, causing speculation about the defence team's strategy.

Mr al-Megrahi has always maintained his innocence, saying he was an airline
official and not - as the prosecution claimed - a Libyan intelligence officer.
His co-defendant at the original trial, Lamen Khalifa Fhimah, was found not
guilty by the judges.

Britain and the US insist that the appeal outcome will not affect their stance
on the sanctions.

The US State Department said there were "no shortcuts" around the UN resolutions
for Libya - a position which has hardened significantly since the September 11
attacks.

Libya remains on the State Department's list of states sponsoring terrorism, and
the Bush administration is determined to establish that Libya has ceased to
support international terrorists before agreeing to relax any sanctions.

The appeal hearing is likely to intensify the media spotlight on the way
terrorist attacks are investigated. The relatives of the Lockerbie victims
contrast the enthusiasm with which the international community has pursued the
perpetrators of the Lockerbie and September 11 atrocities.

"There has been no investigation into who were behind this, whereas with Osama
bin Laden the opposite seems to be happening," said Dr Jim Swire, of the UK
support group for the victims' relatives.

He said he would press for an independent, public inquiry, regardless of the
outcome of the appeal.

However, politicians may prefer to draw a line under the case. The Foreign
Office said it would be "inappropriate to reach a view on an inquiry at this
stage".

The relatives are also angered by their long wait for compensation, which
contrasts with the funds set up in the immediate aftermath of September 11.
Additional reporting by Richard Wolffe in Washington www.ft.com/lockerbie

LOAD-DATE: January 22, 2002

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                        Financial Times (London,England)

                            January 21, 2002 Monday
                                London Edition 1

Sudan's slow self-destruction: Unless the new world order sits up and takes
notice, Africa's largest state is in danger of becoming another Afghanistan
QUENTIN PEEL

BYLINE: By QUENTIN PEEL

SECTION: COMMENT & ANALYSIS ; Pg. 15

LENGTH: 1063 words


El Obeid must rank as one of the more desolate places on earth. It is a landing
strip in the arid scrub of central Sudan, with a distant view of the Nuba
mountains, slap in the middle of the largest country in Africa.

Airport buildings have been manufactured out of cargo containers. A dust storm
blows up every time an aircraft lands. It is not a tourist destination, even for
masochists.

There is a pot-bellied Russian-made Antonov air freighter at the northern end of
the strip, being loaded with food supplies from the World Food Programme. The
sacks are going to be dropped to tribespeople whose crops have failed for the
umpteenth year in succession, because of civil war and drought.

There is another Antonov parked off the runway a few hundred yards away, being
discreetly serviced by a yellow truck. But this one is being loaded with bombs
for the Sudan army. They will be dropped just like the food supplies - rolled
out of the back cargo doors a few hundred feet off the ground - and in much the
same areas, but with very different intent.

That tale of two Antonovs sums up the situation in Sudan, which has been torn
apart by civil war on-and-off for almost five decades, the last 19 years without
a break. At least 2m people have died as a result, and another 4m are refugees
inside their own country - internally displaced people, in the jargon of the aid
world.

Sudan is not exactly a failed state, but it is in a desperate plight. It could
easily be another Afghanistan if the outside world does not start paying serious
attention. All the ingredients are there, except for Osama bin Laden, who was
forced to leave in 1996.

It has a government, part military dictatorship and part Islamic fundamentalist,
which controls Khartoum, plus the most fertile land along the Nile, and the new
oil-fields on the borders of the rebellious south.

It has a judiciary, scarcely independent, and an education system attended by
500,000 of the 1m children born each year in the north. Only 90,000 are likely
to finish school. But outside the central region, the writ of the government
scarcely runs and it seems to have ceased to care.

In the south, the main battle zone, the Sudan People's Liberation Army controls
an area as big as neighbouring Kenya and Uganda put together - or at least they
deny the government forces control. But that war is complicated by at least 40
more sub-conflicts - local tribal wars over cattle-grazing and water rights that
the government has simply given up trying to police. Indeed, Khartoum is
suspected of positively encouraging the chaos.

"This conflict is one of the most complicated in Africa, if not in the world,"
said one long-serving international aid worker in Khartoum. "There is a constant
import of arms, and people turn to banditry to acquire cattle and wealth. The
government spends its money on the security forces, to keep itself in power.
They supply certain tribes with arms, to divide and rule. That is part of it.
The rest is incompetence, plus neglect."

It is not that the government has a monopoly on nastiness, although it is not
very nice. "It is a very divided coalition," says the head of another aid
agency. "It is not so much a battle between Islamists and liberals but between
the people who think this should be an Islamic country and those who believe
they have to be part of the modern world.

"Peace will only happen if the people who want to be part of the modern world,
and want to mend fences with America and Europe, can come out on top."

That is still a very big If. But since September 11, there have been at least
signs that both America and Europe want to re-engage and modernisers in the
Sudan regime are keen to talk. One big question is whether they can deliver. The
other is whether they can overcome decades of bitterness and broken promises to
persuade the SPLA leader John Garang to declare a ceasefire and talk peace.

"I don't see any serious negotiation," says the aid agency director (people do
not like to be quoted by name in a country run by the security services). "I
don't think the SPLA is much better. I don't think there are any good guys."

It is a classic situation where the war has gone on so long that the rest of the
world has turned its collective back - just as it did in Afghanistan.

"There is a terrible record of mistrust, and nobody in the international
community gives a damn," says Clare Short, the UK development minister, who has
just returned from Khartoum.

One hope is that sheer exhaustion will bring both sides to the table. But while
the government insists on a ceasefire without preconditions, Mr Garang wants
guarantees on a secular constitution before he will stop the shooting. Only
outside pressure on both sides is likely to bring them to the table.

The main change is that America has ceased to treat the Sudanese government as a
total pariah. Washington is still sympathetic to the southern rebels, who enjoy
fervent support from US Christian conservatives. But John Danforth, a former
senator, has now held two rounds of talks with the government, trying to find
ways of rebuilding trust.

Aid workers, church leaders and diplomats all believe there is a glimmer of hope
for peace. The Brussels-based International Crisis Group is about to produce a
study* setting out how it could be done.

The ICG argues for all existing peace initiatives - by Sudan's African
neighbours, by Egypt and Libya, by America and the European Union - to be
combined, or replaced by a single one.

The peace process must be built around agreement on self-determination for the
south: on federation or secession. The status of Khartoum, who owns the oil, and
how to unite or divide the armed forces, will all be difficult questions to
resolve. But the detail is secondary.

The overriding lesson is clear. International engagement is essential to prevent
divided countries becoming failed states, and breeding grounds for terrorism. Mr
Danforth is threatening to quit if he cannot make progress in two months. That
would be tragic. America cannot afford to turn its back, any more than Europe
can do so. Peace-making and nation-building are essential tasks of the new world
order, even if they are uncomfortable and often unrewarding.

* God, Oil and Country. Changing the Logic of War in Sudan, International Crisis
Group Press, Brussels quentin.peel@ft.com www.ft.com/terror

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                        Financial Times (London,England)

                            January 14, 2002 Monday
                                London Edition 1

WTO crunch tax decision

BYLINE: By SIMON GREAVES and HAL WEITZMAN

SECTION: FT GUIDE TO THE WEEK ; Pg. 42

LENGTH: 1121 words


The World Trade Organisation's appellate body rules finally in the long-running
dispute between the US and the European Union over a corprate tax law that the
EU says gives American exporters illegal subsidies worth Dollars 4bn a year.
After winning three previous WTO cases on the issue, Brussels is confident of
victory. If it loses, the US will have to change its laws to end the tax break.
If Brussels wins, it will ask a WTO panel to authorise sanctions on US exports.
The US could not block such a request under WTO rules, but is likely to
retaliate with an attack on EU value-added tax systems.

Turkish visit

Bulent Ecevit, the Turkish prime minister, leads a delegation to Washington (to
January 18). Turkey's role in the security force for Afghanistan is likely to be
on the agenda. Turkey, the only Muslim member of Nato and which has the second
largest standing army in the alliance, is to take over the leadership of
Afghanistan's international security force from Britain.

Nuclear arms cuts

Russian and American weapons experts start consultations on nuclear arms cuts
(to January 18).

TUESDAY 15

Zimbabwe crisis talks

Southern African leaders meet in Blantyre, Malawi, to discuss the deepening
crisis in Zimbabwe (to January 18).

Sanctions scrutinised

Benon Sevan, executive director of the United Nations oil-for-food programme for
Iraq, arrives in Baghdad. He will review the controversial deal struck in 1996
whereby Iraq can use revenue from the sale of oil to buy essential supplies.
Sevan will meet Tun Myat, UN humanitarian co-ordinator, and Iraqi officials.

Ship shape to come

World of Residensea, a 40,000-ton ship, is being launched in Oslo. It is divided
into 110 luxury flats and 88 guest suites that are sold as freehold holiday
homes.

Stylish setting

Fashion Week for the autumn/winter season opens in Hong Kong (to January 18).
About 780 exhibitors from 20 countries are expected to attend.

Presidential poll

Members of the European parliament, meeting in Strasbourg, elect a new president
for the parliament to succeed Nicole Fontaine.

Talking turtle

A European symposium on turtles and tortoises is being held (to January 20) in
Vienna, Austria. It will focus on conservation and breeding.

WEDNESDAY 16

Court ruling

Egypt's highest appeals court is to issue a decision on whether Saadeddin
Ibrahim, the jailed US-Egyptian rights activist, should be sent for retrial.

Cypriot negotiations

President Glafcos Clerides and Rauf Denktash, leaders of the Greek and Turkish
Cypriot communities, start a fresh round of UN-sponsored negotiations aimed at
reuniting the island. The aim is for a federated Cyprus to be eligible to join
the European Union in 2004 in the first round of enlargement. The talks are
being held in Nicosia in the buffer zone on the UN-patrolled Green Line that has
divided the island since 1974.

Exchange trip

Russian president Vladimir Putin visits Poland (to January 17). He returns a
visit made by Leszek Miller, the Polish premier, to Moscow in December.

THURSDAY 17

Arab summit

Foreign ministers from the Arab Maghreb Union countries - Algeria, Libya,
Mauritania, Morocco and Tunisia - are scheduled to meet in Algiers (to January
18). The AMU, which was recently revived, aims for the free movement of goods
and people and a revision of tariffs.

Gambian elections

Gambia holds elections to the National Assembly. Forty-five of the assembly's 49
seats are elected by popular vote, with the remainder chosen by the president. A
two-member delegation from the Commonwealth is due to be present to monitor the
elections.

Financial forum

The International Financial Journalists' Group stages a debate in Frankfurt.
Jean-Claude Juncker, the prime minister and finance minister of Luxembourg, will
take part in a discussion on the euro, while Gunter Verheugen, the European
Union enlargement commissioner, discusses EU enlargement. The closing speech
will be by Ernst Welteke, the German Bundesbank president.

Cultural combination

Evangelos Venizelos, Greek culture minister, and Rick van der Ploeg, Dutch
deputy culture minister, open an exhibition in Athens of recent acquisitions by
the Van Abbemuseum of contemporary art at Einhoven in the Netherlands, which has
been closed for rebuilding. The exhibit is part of Greece's cultural Olympiad -
a three-year series of arts events being staged ahead of and during the 2004
Olympic Games in Athens.

King to Beijing

King Abdullah, the 39-year-old who assumed the throne of Jordan three years ago,
visits China (to January 21).

FRIDAY 18

Diplomatic mission

Anthony Zinni, the US's special envoy to the Middle East, is expected to return
to the region to review progress towards peace between Israel and the
Palestinian Authority.

Japanese party time

Japan's ruling Liberal Democratic party holds a party convention in Tokyo. On
January 8 the party unveiled its action plan for 2002, which includes
unequivocal support for the structural reforms outlined by Junichiro Koizumi,
the prime minister and party leader.

Busking all over the world

The eighth annual World Buskers Festival begins at Christchurch Polytechnic, New
Zealand (to January 28). The festival claims to be the largest street performers
event in Australasia and features theatre, music, comic and circus-style acts
from around the world.

SATURDAY 19

Classic couture

The annual Paris haute-couture shows for spring-summer fashion take place

(to January 23). Designers showing their work have been nominated and elected by
their peers.

Mali matches

The African Cup of Nations, the biennial football competition, kicks off (until
February 10). Mali is hosting the 16-nation tournament.

SUNDAY 20

Time up for Farc zone

A demilitarised zone under the control of the Revolutionary Armed Forces of
Colombia (Farc) is due to expire. The government has announced the end of its
peace process with the country's largest leftwing guerrilla group and hinted
that it will reoccupy the rebel-controlled zone that has existed since peace
talks began in 1998. The decision appears to mark the end of President Andres
Pastrana's attempts to reach a negotiated end to almost 38 years of war with
Farc, the western hemisphere's largest insurgent army.

Constitutional change

Congo holds a referendum on changes to the constitution. The new constitution
would provide for a president elected for a seven-year term. A two-chamber
parliament is also proposed. Ten opposition parties are boycotting the
referendum. They claim that the national electoral commission is made up almost
entirely of allies of President Sassou-Nguesso. If the constitution is approved,
a two-stage presidential election will be held on March 10. Compiled by Simon
Greaves and Hal Weitzman Fax +44 20 7873 3196

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                        Financial Times (London,England)

                            January 11, 2002 Friday
                                London Edition 1

Libya's lady OBSERVER COLUMN

SECTION: OBSERVER ; Pg. 17

LENGTH: 222 words


Libya's lady

There are some novel tactics behind the Libyan investment in Juventus, the
revered "Old Lady" of Italian football. This week it was revealed that the
Libyan Arab Foreign Investment Company had bought a 5 per cent stake in the
recently floated club, worth Euros 23m.

Yesterday, Libyan leader Muammar Gaddafi's son, al-Saadi, went a step further,
telling Gazzetta dello Sport that Lafico aimed to own 20 per cent of the club
within a few years. There's a history of sorts between the two sides.

The Turin-based club is controlled by the Ifi holding company of the Agnelli
clan, owners of Fiat. Lafico bought a minority stake in a struggling Fiat in
1977 and sold out in 1986.

"Juventus need fresh capital and we believe we are making another great
investment," said lifelong Juventus fan al-Saadi, 28.

The market seems unexcited by the idiosyncratic investor and the shares
yesterday remained below the club's Euros 3.70 offer price.

That may have something to do with al-Saadi's further comments: "This cannot be
considered a financial deal. Libya believes in sport and in its youth and
Juventus will help us develop the enormous potential of our football."

No doubt, too, that the football crazy al-Saadi, who's played striker for his
national team, is dreaming of linking up with Juventus hitman Alessandro del
Piero.

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                        Financial Times (London,England)

                           January 10, 2002 Thursday
                                London Edition 1

Chief of the Arab League to visit Iraq

BYLINE: By JAMES DRUMMOND

SECTION: WORLD NEWS ; Pg. 8

LENGTH: 311 words

DATELINE: CAIRO


The Iraqi regime of Saddam Hussein, under pressure from the US and still not
fully rehabilitated in the Arab world, is due to receive a morale-boosting visit
this month from Amr Moussa, the outspoken secretary-general of the Arab League.

The league confirmed yesterday that Mr Moussa would visit Baghdad in January,
but no date had yet been set. Iraqi newspapers reported yesterday that a
three-day trip was scheduled for January 18.

Mr Moussa is more popular in Baghdad than his predecessor, Esmat Abdel Magid,
whom the Iraqi regime perceived as favouring Kuwait after the Gulf war. But Mr
Abdel Magid did visit Baghdad after military strikes carried out by the US and
Britain in 1998.

This will be Mr Moussa's first visit to Baghdad since he became
secretary-general last year. It comes at a time of rising concern in Iraq that
Mr Saddam's regime will be the next target in the US anti-terrorism campaign. It
will be used in Baghdad to underline Arab opposition to the targeting of Iraq by
the US. Several Arab states have expressed dismay at US hints of possible
action.

But the trip will probably be pegged to preparations for an Arab summit
scheduled to be held in Beirut in late March. Mr Moussa left Cairo yesterday for
a tour of Saudi Arabia, Jordan, Syria, Sudan, Lebanon and Libya.

The Arab world, keen to put on a show of unity in the face of the conflict
between Israel and the Palestinians, is witnessing an embarrassing spat over the
summit between Libya and Lebanon.

Lebanese Shia leaders, including Nabih Berri, the speaker of the Lebanese
parliament, have been airing old accusations that Muammer Gadaffi, the Libyan
leader, was responsible for the death or disappearance in 1978 of Imam Moussa
Sadr, a charismatic Shia spiritual leader.

Mr Gadaffi denies the charge and in turn accuses Mr Berri of responsibility for
the Imam's disappearance.

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                        Financial Times (London,England)

                           January 9, 2002 Wednesday
                                London Edition 1

Libya buys Juventus stake

SECTION: SHORTS ; Pg. 21

LENGTH: 32 words


The Libyan Arab Foreign Investment Company, a former partner of Fiat, has bought
a 5.31 per cent stake in the football club Juventus, which is controlled by the
Fiat-owning Agnelli family.

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                        Financial Times (London,England)

                           January 9, 2002 Wednesday
                                London Edition 2

Libyans to take Juventus stake NEWS DIGEST

BYLINE: By THOROLD BARKER

SECTION: COMPANIES & FINANCE INTERNATIONAL ; Pg. 27

LENGTH: 149 words

DATELINE: MILAN


The Libyan Arab Foreign Investment Company (Lafico), yesterday emerged as the
first new investor to take a significant stake in Juventus, the Italian football
club, since its flotation in December.

Lafico, Libya's foreign investment agency, has taken a 5.3 per cent stake in the
25-times Italian league champions, worth nearly Euros 23m (Dollars 20.5m) at
yesterday's closing price.

Juventus said "(the club) views the opening of the shareholding system to such
an important institutional investor, as Lafico is, as a confirmation of the
appeal exercised by the company and its entertainment projects."

Juventus was the third big Italian club to float, joining Lazio and Roma on the
Milan stock exchange. It listed 37 per cent of its equity at Euros 3.7 a share
last month valuing the company at more than Euros 440m. The shares fell 1 per
cent to Euros 3.58 yesterday. Thorold Barker, Milan

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                        Financial Times (London,England)

                            January 5, 2002 Saturday
                                London Edition 1

Uneasy peacemakers: Ian McBride on a tortuous and occasionally farcical process

BYLINE: By IAN MCBRIDE

SECTION: BOOKS ; Pg. 4

LENGTH: 1051 words


ENDGAME IN IRELAND by Eamonn Mallie and David McKittrick

In April 1993, GerryAdams was spotted entering John Hume's home in London-derry.
We have come such a long way since the days when Sinn Fein were pariahs
everywhere outside Libya that it is sometimes hard to recapture the outrage
provoked by the revelation that the SDLP leader was supping with the devil. As
we now know, the Hume-Adams dialogue was just one thread in a web of
subterranean channels between the politicians and the gunmen.

John Major famously told the Commons it would turn his stomach to talk to
terrorists, but, later in the same year, Major admitted he had sanctioned
contacts between MI5 and Martin McGuiness. In Dublin, Albert Reynolds and his
team were said to be absolutely furious. But the taoiseach, unknown to the
British, was pursuing his own underworld connections with northern republicans,
and had established yet another secret line of contact to loyalist
paramilitaries. By the time the Downing Street Declaration was released in
December, almost everyone was talking to almost everyone behind everyone else's
back. The only exception was the Unionist party, whose resolutely low-profile
leader, Jim Molyneaux, apparently had no inkling the Irish political landscape
was about to be irrevocably transformed.

In reconstructing the tortuous and occasionally farcical story of the peace
process, Mallie and McKittrick had unprecedented access to the key players, from
Bill Clinton to Johnny "Mad Dog" Adair. Endgame in Ireland is the best book on
the subject since, well, since their last one, The Fight for Peace, on which it
draws extensively. What comes through again and again is the extraordinarily
accident-prone, close-run nature of the whole business.

The 1981 hunger strike, which propelled republicans into politics, was a
prisoner initiative, launched against the wishes of the IRA leadership. The
decision to run Bobby Sands as a parliamentary candidate, which sacrificed the
sacred cow of abstentionism, was a risky publicity stunt. Among the many
first-hand accounts, Danny Morrison explains how his famous slogan, "the ballot
box in one hand and the Armalite in the other", was an off-the-cuff remark
prompting fellow republicans to say: "Oh my God, what have you done now?" Bill
Clinton tells how he was bounced into announcing a visa for Gerry Adams at an
Irish-American meeting. Clinton reflected: "I'm not sure at the time I
understood all the ramifications of what I had said."

While 70 interviews (carried out for the Brook Lapping television series) add to
an extraordinarily vivid narrative, the authors diplomatically skirt the central
question of who is getting shafted by whom.

It would be a mistake to assume positions have mellowed because Protestants and
Catholics are slowly overcoming centuries of mistrust. At the high political
level there have indeed been moments of civility between bitter enemies, modest
but nonetheless significant. One concerns the amiable Unionist, Dermot Nesbitt,
standing at a urinal during the first all-party talks at Stormont. "I felt a
hand on my shoulder, and realised it was Gerry Adams who was inquiring about my
well-being. Lost for words and for want of something better to say I said, 'I
didn't realise you were so big.'"

On the ground, however, there was every sign that sectarian antagonisms were
renewing themselves as continued ethnic cleansing and the annual Drumcree
confrontations demonstrated. The main impetus came instead from outside Northern
Ireland: from the London/Dublin partnership that emerged from the Anglo-

Irish Agreement of 1985, and from Washington. It is no surprise that
decommissioning finally began in response to US pressure following the
embarrassing arrest of IRA veterans in Columbia.

Once embarked upon, the move towards a political strategy had its own momentum,
for the ballot box and the Armalite could not, after all, go hand in hand. After
1987 the Provisionals were equipped with RPG-7 rocket launchers, SAM-7
surface-to-air missiles and a ton of Semtex explosive. Yet it proved impossible
to escalate the violence without "mistakes": 11 civilians killed by the
Enniskillen Remembrance Day bomb in 1987, two children at Warrington in 1993,
and nine

Protestants at the Shankill Road fish shop in the same year. Sinn Fein now
boasted the support of 40 per cent of northern Catholics, but they would never
overtake the SDLP without dropping much of their ideological baggage. And those
who think that the ceasefire is a con trick would do well to consider just how
many republican U-turns have taken place since 1993. Sinn Fein has achieved none
of the goals built into the original Hume-Adams proposals, no time-frame for
British withdrawal, no arrangements for joint authority over the North, no
commitment that the British government would "join the ranks of the persuaders"
in convincing Unionists their future lay in a united Ireland. Instead they seem
to be confirming the old nationalist pattern whereby the revolutionaries of one
generation become the pragmatists of the next.

Meanwhile, those with stomachs more delicate than John Major's are not having an
easy time. At present well-wishers to the peace process are prepared to connive
in the Orwellian fiction that Sinn Fein and the IRA are separate entities. We
must also accept a sanitised history of the republican movement, in which the
Provisionals were impelled into armed struggle as if their acts lay beyond
conscious reflection or choice. By ostentatiously dismantling security
watchtowers in County Armagh, the government pays lip service to the notion that
IRA decommissioning is part of a wider "demilitarisation": the implication is
that there is a moral equivalence between the violence of the IRA and the armed
force used by the state. It is this kind of constructive hypocrisy on which the
survival of the Good Friday Agreement depends.

The price to be paid, however, is that many difficult questions are never posed.
During the impasse over decommissioning Adams explained to Clinton that, if the
IRA was pressurised into giving up its arms, "it will look like everything they
did for 30 years was for nothing". As Sinn Fein transforms itself into the new
SDLP, it is hard not to recognise the desperately painful truth in these words.

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                        Financial Times (London,England)

                           January 2, 2002 Wednesday
                                London Edition 1

Foreign Office feared fallout from Lonrho 'odium' PUBLIC RECORD OFFICE PAPERS
FOR 1971:

BYLINE: By LYDIA ADETUNJI

SECTION: NATIONAL NEWS ; Pg. 6

LENGTH: 727 words


The Foreign Office feared that "odium" attracted by the relations of Lonrho, the
African mining conglomerate synonymous with the late "Tiny" Rowland, with
African heads of state would rub off on the government.

The extent of government unease with Lonrho's maverick business style is
revealed in a Foreign Office paper released yesterday under the Public Record
Office's 30-year rule.

The report - written the year before Edward Heath, the then prime minister,
described Lonrho as the "unacceptable face of capitalism" - said there "was
evidence that Lonrho had employed bribery in Africa in order to oil the wheels
of business", and had been secretive in a way that occasionally bordered on
"outright deceit".

Officials feared this would reflect badly on government because of the
impression Lonrho had created - helped by the social standing of some of its
directors - that it enjoyed the backing of Whitehall.

Of the Lonrho directors, Mr Rowland was "most open to the charge of sharp
practice", but "much of what Lonrho men told Whitehall officials had to be taken
with a pinch of salt".

Lonrho put strong pressure on the government to further its interests, with the
help of highly placed contacts and direct approaches to ministers.

One such instance was the "calculated campaign" by Mr Rowland to "stampede" the
Export Credits Guarantee Department into agreeing Pounds 20m credit for the
Sudan, while Duncan Sandys - the conservative MP and former minister, then a
director of Ashanti Goldfields, a Lonrho subsidiary - lobbied cabinet ministers.
Lonrho was trying to set up the deal in return for being appointed the Sudan's
purchasing agent in London.

The report also highlighted the extent to which Lonrho was willing to involve
itself in African politics. The Foreign Office suspected the company helped to
reverse a coup that briefly overthrew the Sudanese president by supplying an
aircraft to aid the effort against the insurgents and, possibly, by persuading
Libya's Colonel Gadaffi to force down an aircraft carrying the usurper.

Elsewhere in business in 1971, transcripts of a telephone conversation between
Edward Heath and Richard Nixon show the US president agreed that the
nationalisation of parts of the insolvent Rolls-Royce would make "the best out
of a bad situation".

The company had run into trouble with its RB211 engine, which it was contracted
to supply to Lockheed, the US aerospace group. Nationalisation was a U-turn from
a government that had undertaken not to support "lame ducks".

Mr Heath telephoned Nixon to reassure him that, although nationalisation was
inevitable, a new contract for the engines could be negotiated with Lockheed.
Nixon accepted the move, fearing Rolls-Royce's problems would otherwise affect
Lockheed's already precarious financial position.

The cabinet agreed that acquiring Rolls-Royce's aero engine and marine turbine
divisions was the "only tenable course of action" given the implications for
defence and employment should it be left to fail.

One ministerial memo suggests the government did not wish to publicise that it
always intended to refloat the undertaking on to the private sector.

It added that a limited liability company was preferable to a public corporation
as the latter option would "recognise the fact that this undertaking is, in
effect, being nationalised".

Rolls-Royce had given no hint of its difficulties to Lockheed, and when its
president was eventually told, after the nationalisation had been decided, it
was "a great shock to him".

A further test of the "lame duck" policy came in June when Upper Clyde
Shipbuilders, the Glasgow-based consortium, declared itself insolvent.

The cabinet decided it could not justify putting more capital into "the symbol
of an ailing enterprise, bedevilled by bad labour relations and poor management,
in whose future prospects there could be little confidence".

However, minutes show this stance gradually shifted.

By autumn a serious dispute with the unions was under way. John Davies, the
trade and industry secretary, told colleagues that if the yards were to be kept
at work while a solution was sought, the government would be forced to accept
onerous new financial commitments.

He warned of a possible 15,000 redundancies should Upper Clyde Shipbuilders
collapse. The government stepped in and baled out the company in February 1972.

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                        Financial Times (London,England)

                           December 29, 2001 Saturday
                                London Edition 1

New currencies, slow growth and the return of hippy chic: What can the world
expect in 2002? FT writers identify the economic, political and social trends:

BYLINE: By GERARD BAKER, LIONEL BARBER, JAMES BLITZ, CLIVE COOKSON, ROBERT
COTTRELL, HOLLY FINN, CHRIS GILES, ROBERT GRAHAM, BRIAN GROOM, BEN HALL, MICHAEL
HOLMAN, ROULA KHALAF, RICHARD LAPPER, TOM O'SULLIVAN, JOHN PLENDER, JOHN
THORNHILL, MAX WILKINSON and MARTIN WOLF

SECTION: COMMENT & ANALYSIS ; Pg. 13

LENGTH: 2789 words


It has been a bad year for forecasters, writes Max Wilkinson. The slowing of the
global economy was underestimated by almost everyone. The stock markets have
disappointed both the optimists and the purveyors of extreme gloom and President
George W. Bush's response to a crisis was hardly foreseen by anyone.

Despite the difficulties, the FT's soothsayers did pretty well on December 30
2000 - although some of them were rather Delphic.

Martin Wolf painted two scenarios for the US economy but he made the right call:
"On balance the pessimists will be proved right."

John Plender correctly foresaw that the collapse of technology stocks would not
cause a "systemic earthquake", partly because the US Federal Reserve would "keep
equities afloat". But he also suggested fundamental reasons why shares in
general should weaken during the year, as they did.

Robert Thomson underestimated the ability of Mr Bush to push tax cuts through
Congress - at the start of his term. But the wrangling about a new package of
hand-outs after September 11 may prove our US editor right for unexpected
reasons.

Richard Lapper hedged his bets on whether last year's International Monetary
Fund rescue of Argentina would be enough. But (despite the double negative) he
is in the money for saying: "There is no certainty that Argentina will not be in
the same position a year from now."

Michael Holman wins the booby prize for a commendably clear and completely wrong
prediction that "Robert Mugabe will not last the year". The Zimbabwean president
seems to have remarkable staying power, so we have asked the question again. Guy
de Jonquie res is a runner-up for being over-pessimistic about the chances of
getting another trade round going. But that was before September 11.

Last, John Thornhill deserves an honourable mention for saying there might be a
war in Asia -although he failed to mention Afghanistan.

Where will the S&P 500 be this time next year?

The big monetary policy stimulus in the US in 2001 means that it will be
dangerous to be out of the equity market at the start of a year when America is
set to recover ahead of Europe and Japan. The penalty for holding cash is high.
But the recovery will be anaemic because the wealth effect from the earlier
stock market boom has to unwind. Spending by debt-burdened consumers and
companies will thus be slow to resume and corporate earnings growth will
disappoint.

The stock market rally also starts from a valuation base that is historically
high in price/earnings terms and in market capitalisation relative to gross
domestic product. So the rally is vulnerable to shocks, with the most obvious
threat, apart from weaker than expected earnings, being a destabilising plunge
in the yen and deflation in Asia. If shocks are avoided, the S&P 500 should end
the year higher than today - but by no great margin. John Plender

Will Putin and Bush remain friends?

A Russian leader has no real friends at home, only rivals, sycophants and
drinking mates. And when, like Vladimir Putin, you do not even drink very much,
the circle is more than usually limited.

Hence Mr Putin's enthusiasm for befriending other world leaders. They understand
his problems, even if they cannot always do much about them. Mr Putin's easy
relations with Mr Bush have been a pleasant surprise for both men.

Mr Putin understands the US cannot always do what Russia wants of it. What he
asks instead is a reliable flow of information about US intentions, so he can
plan for problems well in advance. And, so far, he is getting that from Mr Bush.

The friendship looks robust enough to survive even quite serious policy
reversals - as it has just survived the US withdrawal from the anti-ballistic
missile treaty. In 2002 it may have to survive disagreements over arms-reduction
strategies and over Nato enlargement. But even then, Mr Bush and Mr Putin will
still be smiling when they meet. It dignifies them both. And besides, they have
plenty of subordinates who can do the arguing in private if necessary. Robert
Cottrell

Who will be president of France?

The election in April looks so close as to be unpredictable. Though neither has
formally declared his candidacy, the polls put Jacques Chirac and Lionel Jospin
neck and neck.

If Mr Jospin fights a good campaign and homes in on his opponent's weaknesses -
his age, his poorly judged 1997 dissolution of parliament and corruption at
Paris city hall while mayor - he should win. But Mr Chirac is a formidable
fighter, loves pumping the flesh and has not been worn down by running the
country these past five years. Robert Graham

Can the Japanese economy get worse?

Of course. And it will. Deflation is accelerating. The result is high and rising
real interest rates. This year's recession has been relatively mild. Next year
it is likely to deepen.

Policy is in paralysis. The government wants the Bank of Japan to take charge;
the BoJ thinks that any further economic stimulus is the government's
responsibility. Prime Minister Junichiro Koizumi's economic reforms have made
little progress. There is no solution in sight to the huge quantity of bad debt
held by private banks.

A deteriorating economy and rising international concern about Japan's plight
will push the yen lower, giving a welcome boost to Japanese exports but not
enough to turn the economy round.

Despite the gloom, most Japanese people are happy. They still have jobs; and
deflation increases the purchasing power of their money. Until the sense of
economic crisis becomes widespread, little of importance is likely to change.
Chris Giles

Which fashion houses will be fashionable?

Chloe, owned by Swiss luxury goods group Richemont, is frontrunner for the White
Hot prize. British designer Phoebe Philo spent four years in the shadow of
Stella McCartney (who has now moved on to her own-name label) before taking over
the reins of the French house. Her spring 2002 collection, inspired by the
heady, hippy chic days of Talitha Getty, makes white the latest black, Chloe the
newest Gucci.

But Yves Saint Laurent, owned by Gucci Group, will take the trendsetter trophy
again. This year, YSL designer Tom Ford made must-haves of peasant blouses,
ruched satin and tooled leather. What will be "in" next year? His Out of Africa
caftans, leopard prints and ring-pierced leather. Originals will be available at
YSL stores, including a new Sloane Street location; copies just about everywhere
else.

Most Promising Revamp? LVMH-owned leather house Loewe has hired Jose Enrique Ona
Selfa as its new designer. Those who have never even tried pronouncing the
label's name correctly (it's loo-weh-vey), will get plenty of practice. The
Spaniard, who can make leather ruffles look like lace, is hot. Holly Finn

Will Brown campaign for British euro entry?

Not this year, and quite possibly not before the next UK general election,
expected in 2005. Even the greatest euro-enthusiasts in Downing Street and the
Foreign Office do not expect a referendum before mid-2003.

Although Tony Blair would love to hold a referendum in this parliament if
conditions allow, Mr Brown will not agree unless he believes the economic case
is clear and unambiguous. His supporters say the argument must not only be won
at the time of the referendum but also seen by the public as a good move for two
or three years after Britain joins. They also cite the No vote in Denmark's euro
referendum - when an ambiguous economic assessment was given halfway through the
campaign - as a pitfall of not having a clear case. Expect further government
tension on this issue. Brian Groom

Will a human being be cloned in 2002?

The hysterical publicity in 2001 about maverick doctors wanting to clone people
- followed by the production of cloned human embryos - has created a widespread
impression that a cloned baby will appear soon. The reality is different.

In the first place, science has not reached the stage where "reproductive
cloning" is possible. The cloned embryos produced in November by Advanced Cell
Technology in the US did not get beyond the six-cell stage - far too young to
prove whether they would survive when implanted into a foster mother's womb -
and many scientists regard the ACT announcement as little more than a publicity
stunt.

Second, even if reproductive cloning were technically feasible, none of the
would-be cloners has the laboratory facilities or access to the large number of
human eggs that would be required to carry it out. It is quite likely that a
tabloid newspaper somewhere in the world will claim the birth of a cloned baby
during 2002 but very unlikely that this will really happen. Clive Cookson

Will Prodi make a comeback?

The president of the European Commission compares himself to a marathon runner
but halfway through his five-year term Romano Prodi has still to hit his stride.
Blame a poor start, weak staff and a lack of discipline. His big mistake was to
spend too much time cultivating the European parliament rather than
consolidating his base in the European Council, where the power really lies.

All is not lost, providing Mr Prodi makes the Commission a power broker during
enlargement negotiations with central and southern European candidates, due to
reach a climax next year. He should also use his post to preach market
liberalisation, a big theme of the Spanish presidency that starts on January 1.

Another big test will come in next year's constitutional convention. Mr Prodi
will need all his skill and political courage to halt what looks like a terminal
decline in the political authority of the Commission. Lionel Barber

Will Berlusconi blow it?

However much his critics would wish otherwise, the 65-year-old media magnate
will still be Italian prime minister in 12 months' time. But he can expect
several awkward moments in the coming year.

The worst may come in the spring when judges rule in a long-running trial
against Silvio Berlusconi on charges of corrupting judges. His government will
continue to be rocked, too, by disputes between Europhobes such as Northern
League leader Umberto Bossi and committed pro-Europeans such as foreign minister
Renato Ruggiero.

But Italy's public prosecutors will not topple Mr Berlusconi from power. Mr
Bossi will not desert the government as he did in 1994. And despite all his
recent declarations about wanting to defend Italy's national interests, Mr
Berlusconi will surprise his European Union partners by confessing that, at
heart, he is a good European. James Blitz

Will the US productivity miracle prove a mirage?

No - but only because it takes time to distinguish a sustainable rise in the
trend rate of productivity growth from a one-off jump or the reversible impact
of unsustainable investment.

Between the third quarter of 1990 and the first quarter of 2001, the successive
peaks of the past cycle, labour output per hour in the non-farm business sector
rose at a compound annual rate of 2 per cent. In the previous cycle, which began
in the third quarter of 1981, productivity rose at only 1.5 per cent a year. But
this improvement was hardly a miracle: output per hour rose at an annual rate of
2.8 per cent between 1957 and 1973.

Over the last five years of the past cycle, productivity growth accelerated to
2.4 per cent a year. But this coincided with unsustainable economic growth
driven by an equally unsustainable investment boom. Trend annual growth in
labour productivity per hour may well be 2 per cent now. But it could be even
lower. The truth will not be known until the end of the next cycle. Martin Wolf

Will Arafat survive?

Although he is physically trapped in his West Bank headquarters in Ramallah and
politically isolated, no one dares to write Yassir Arafat off yet. As much as
Israel would like to be rid of him, it is unlikely to eliminate him for fear of
provoking international outrage. Exasperated as the US is with Arafat, it has
yet to give up on him, for lack of a better alternative.

What seems certain, however, is that Arafat's leadership has been permanently
damaged. At home, he has lost much of his credibility. Abroad, he is viewed as
untrustworthy and ineffective. This need not mean that his political career is
over. But it does suggest that his ability to lead will be increasingly
crippled. Roula Khalaf

Will the euro prove to be expensive?

There have been so many dire predictions about the changeover to euro notes and
coins, you would think the new currency would be a costly disaster. It will not.

Yes, pensioners will be confused. Notes will be forged. Cash dispensers will run
out of money. So what? Within a few months Europeans will learn to respect the
euro, if not to love it.

Consumers will be no worse or better off. Retailers have so far not used the
changeover to increase prices. But nor will prices across the eurozone converge
rapidly to the lowest level, if at all. Inflation - the most important test -
will be subdued.

Germany will suffer more than others under the single monetary policy and tight
public spending constraints. The euro will turn out to be more expensive for the
Germans than for anyone else. Ben Hall

Which team will win the World Cup?

The Fifa World Cup finals in Korea and Japan - the first to be held in Asia -
will have an all-too-familiar look. Expect Argentina and Italy, both previous
winners, plus holders France, to be in the running. Do not be surprised if
Brazil, which struggled to qualify, does well too.

Argentina is already installed as favourite, based on the ease with which it
qualified plus the quality of players such as Juan Sebastian Veron and Javier
Saviola. Economic collapse at home will only heighten the desire to succeed. Tom
O'Sullivan

Is Afghanistan going to be governable?

After two decades of foreign-backed communist rulers, warlordism and brutal
theocracy, almost any conceivable development will be positive.

But there are grounds for optimism. First, however imperfect it appears, the
interim government led by Hamid Karzai does represent a broad range of Afghan
interests. Second, the United Nations - and powerful foreign governments - are
desperate to stabilise Afghanistan. Third, the international community is
prepared to pump billions of dollars into reconstruction.

But Afghanistan's tribal traditions, drug-fuelled criminal culture and regional
power rivalries will ensure that any future political system will diverge wildly
from western notions of a nation state. John Thornhill

Will Mugabe go quietly?

The pressures on him grow by the day: tourism is declining; food and fuel
shortages are growing; foreign investment has dried up; inflation is soaring;
the national currency is declining; and International Monetary Fund and World
Bank support is in effect suspended.

With draconian legislation in place, the run-up to the presidential election in
March will be relatively peaceful. The worst thuggery will come in the last week
before the poll - but it will be too late to avert defeat.

Mr Mugabe may fight on from a presidential bunker but, at the risk of turmoil in
the towns, where opposition to his regime is at its strongest. In that case the
army will be forced to arbitrate and ensure his departure, in return for amnesty
for him and his family or their safe passage to Libya. Michael Holman

What next after Argentina's default?

Debt default and a new currency should give the government a chance to soothe
social tensions. But monetary stability remains precarious and without access to
foreign capital it is difficult to see how Argentina can return to sustained
growth.

Elsewhere in Latin America, no other country will default on external debt,
although Brazil could come under pressure if the inflow of foreign investment
declined. The drugs-financed guerrilla war will rumble on in Colombia. But
Venezuela, where President Hugo Chavez's radical populism has polarised
politics, is the most likely trouble spot. Richard Lapper

Can Bush translate military triumph into domestic success?

Successful war leaders have something of a mixed record on the home front.
George Bush Snr found what an impostor military triumph could be when it was
quickly succeeded by electoral disaster. But Franklin Roosevelt proved an
unmatched leader in war and peace and Abraham Lincoln was no slouch on either
front.

This is pretty august company for George W. Bush, less than a year into his
presidency. His place in history will depend on maintaining the momentum of
military success overseas, without risking overreach in the global war on
terror. But it will also require him to be the statesman at home. That will mean
tilting somewhat towards a more centrist, nation-first approach. Handled
skilfully, his chances of entering the pantheon, albeit in the lower ranks, are
not bad. Gerard Baker

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                        Financial Times (London,England)

                            December 21, 2001 Friday
                                 USA Edition 2

Time to give Cuba a chance and take it off the terror list

SECTION: COMMENT & ANALYSIS ; Pg. 12

LENGTH: 504 words


From Rep James P. McGovern.

Sir, Since September 11, the Bush administration has wisely chosen to reach out
not only to our traditional allies but also to many long-time adversaries in
order to create an international coalition to combat terrorism. The US has
eagerly courted Syria, Iran and Libya, as well as nations with which we have had
sharp differences over human rights, such as Pakistan, Uzbekistan, Russia and
China. Unfortunately, there has been one notable exception to this policy of
outreach: Cuba.

There is still time to reach out to Cuba and exploit that country's close
relations with national leaders throughout the developing world. An obvious
first step would be to remove Cuba from the US list of countries that allegedly
support terrorism, as the Blair government recently suggested.

Such an action would clearly demonstrate our seriousness in the fight against
terror and show President George W. Bush's sincerity in saying that other
countries should be judged by what they will do in the future on terrorism, not
by what they may have done in the past. However, it would not and should not
mute legitimate US criticisms of Cuba's poor record on democracy and human
rights.

Unlike other countries on the State Department's list of terrorist nations, Cuba
is not accused of planning, financing, sponsoring or carrying out acts of
international terror. US defence and security agencies cannot report any
terrorist acts sponsored by Cuba itself and have also concluded that Cuba does
not pose a significant security threat to the US or to other countries in the
region.

The US justifies Cuba's inclusion on the list by stating that Cuba provides a
haven to Basque terrorists and US fugitives and - like several other Latin
American and European countries - maintains ties to Colombian guerrilla forces.
However, the Basques are there as the result of a Cuban-Spanish agreement. The
fugitives are there because there is no US-Cuban extradition treaty. And Cuba
has facilitated talks between the Colombian government and the guerrillas.

Since September 11, despite harsh rhetoric opposing the bombing in Afghanistan,
the Cuban government has denounced terrorism and spoken out strongly against the
attacks on the US. It has pledged support for ending world terrorism and stated
its eagerness to work with the United Nations to that end. Through the UN and
the Organisation of American States, we should be welcoming, testing and
harnessing these offers.

The US list of terrorist nations must have genuine legitimacy and meaning. It
should be a serious legal document, not a political plaything or a tool for
applying diplomatic pressure on issues other than terror. President Fidel Castro
does little to hide his enmity of the US - and vice versa. Each country,
however, has much to gain by collaborating in the war against international
terrorism. The first step towards increasing mutual confidence is to remove Cuba
from the list of terrorist nations.

James P. McGovern, US House of Representatives

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                        Financial Times (London,England)

                           December 20, 2001 Thursday
                                London Edition 1

Wembley chosen but inquiry delays scheme NATIONAL STADIUM MINISTER ORDERS
INDEPENDENT REVIEW INTO AWARDING OF CONTRACTS:

BYLINE: By MATTHEW GARRAHAN and CATHY NEWMAN

SECTION: NATIONAL NEWS ; Pg. 3

LENGTH: 948 words


The government and the Football Association yesterday finally chose Wembley as
the site of the national stadium, but another four months will lapse before it
becomes clear whether the troubled project stands a chance of being built.

But if an independent inquiry ordered by Tessa Jowell, sport and culture
secretary, finds fault with contracts awarded by the FA to Multiplex, the
construction company, the scheme could be scuppered. This would offer hope to
Birmingham's rival bid.

It was revealed yesterday that the choice of Multiplex by Wembley National
Stadium Limited, the FA subsidiary in charge of the project, had been the
subject of an independent review by David James, the troubleshooter brought in
by the government to rescue the Millennium Dome.

Mr James' review is understood to reflect criticisms made at the time Multiplex
won the contract. Prior to winning the Wembley deal, Multiplex had been awarded
a stadium expansion contract at Stamford Bridge. This is home to Chelsea
football club, of which Ken Bates is chairman.

Mr Bates was chairman of WNSL when Multiplex was awarded the Wembley deal but is
no longer involved in the scheme.

Mr James' review found no evidence of "criminality or impropriety" in the
procurement process, but was "critical of the procurement process up to
September 2000". Mr Bates was last night considering his response to the
findings of the James inquiry and to Ms Jowell's comments. He declined to
comment.

Ms Jowell insisted the FA and WNSL clear four hurdles before the Wembley deal
was finalised. Independent scrutiny into the Multiplex contracts needs to be
carried out, to assess whether it offers value for money. The National Audit
Office is to analyse whether the Pounds 20m of public funds for transport links
is money well spent; corporate governance changes have to be made; and a process
of due diligence needs to be completed.

If the NAO decided the Pounds 20m was an inappropriate use of public funds, it
would be a setback but would not derail the project. More serious would be
criticism of the choice of Multiplex as part of the requested independent
review.

If fault is found with the Multiplex contracts, the Wembley plans could collapse
as the company is an integral part of the FA's financing package. Multiplex is
to underwrite the stadium's construction risk and if the FA was forced to reopen
the construction tendering it is unlikely Multiplex would remain a supporter.

In an interview with the Financial Times, Patrick Carter, author of the national
stadium report which endorsed Wembley as site of the national stadium, said the
FA had until March to complete due diligence on the scheme.

"We are suggesting a pretty finite timetable," he said. "If Wembley isn't taken
to contract within that time, then Birmingham should be considered." Wembley was
chosen over Birmingham, he added, because it offered better prospects for
premium seat income.

"If you look at the income of a 90,000-seat stadium, the general admission seats
pay for the running of the stadium. But if you want to borrow money (to build
the stadium) we have to do it on the back of income from premium seats."

Mr Carter blamed a "muddled picture" over the lines of responsibility for the
project's previous failures. "People were very frank to us that WNSL was
unconvincing. The review was very clear - they had to strengthen the
management."

He added he was "impressed" by changes made by WNSL and the FA to the project.
"One of the things the FA has had to do is take ownership of the scheme and see
it through, and it has responded to that. It now has 90 days or so to get things
tied down."

Ms Jowell said if the stadium failed "the FA accept, as does the government,
that it remains a possible outcome that no national stadium will be developed".

Adam Crozier, FA chief executive, said: "It will be one of the finest, if not
the finest, football stadiums in the world."

Troubleshooter turns his guns on the biggest challenges

David James is a man who relishes challenges. Pitch at him the Millennium Dome,
Railtrack, Wembley Stadium and he keeps coming back for more. And all this since
just last year, writes Scheherazade Daneshkhu.

At 64, an age when most people's thoughts turn to retirement, Mr James would be
happy to take on the high-profile disaster story of Railtrack after a gruelling
15 months sorting out the finances of the Dome.

Mr James has been working as an unpaid consultant for WestLB, the German bank
that has made an offer for Railtrack. If the bank succeeds, he would be made
chairman.

"I'm a serious trouble-shooter and you must go for the biggest," he said of the
attractions of Railtrack. "It's a matter of pride."

In his long career, Mr James helped MI6 unravel the Iraqi supergun affair after
one of his team uncovered suspect parts at a subsidiary of Eagle Trust, the
company that he was chairing. He was caught up in the 1986 US bombing raid on
Libya while negotiating the release of 12 British hostages who worked for a
subsidiary of Central & Sheerwood, an industrial holding company.

Other corporate missions have included helping to structure the rescue of the
Lloyd's of London insurance market and unwinding the global freight group LEP
with Pounds 750m of debts.

He accepted the daunting task of ensuring the Dome traded as a solvent company
with only three months trading left when he was appointed chairman in September
2000.

That job was discharged with confidence this week when the Dome was handed over
to liquidators at KPMG for a solvent wind-up, and Pounds 25m was handed back to
the Millennium Commission.

A workaholic bachelor, Mr James has a keen interest in the arts, horseracing and
cricket.

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                        Financial Times (London,England)

                           December 20, 2001 Thursday
                                London Edition 2

Inquiry casts doubt on plan for Wembley NATIONAL STADIUM MINISTER ORDERS
FOOTBALL ASSOCIATION TO OBTAIN INDEPENDENT REVIEW OF DEAL WITH MULTIPLEX:

BYLINE: By SCHEHERAZADE DANESHKHU, MATTHEW GARRAHAN and CATHY NEWMAN

SECTION: NATIONAL NEWS ; Pg. 3

LENGTH: 938 words


The troubled Wembley national stadium project has been shelved for another four
months after the government raised serious questions about the Football
Association's plans.

Tessa Jowell, culture secretary, ordered the FA to obtain an independent
assessment of its deal with Multiplex, the construction company, to build a
90,000-seat stadium in north-west London.

The government had been planning to approve the project on Monday but was forced
to delay a decision after allegations about the contract with Multiplex came to
light.

Ms Jowell told the Commons yesterday that the national stadium may not be built
at Wembley, and may not even be built at all.

If the independent review into the FA's plans finds serious faults, the national
stadium scheme could be awarded to Birmingham instead.

Ms Jowell was told at the end of November about concerns that Wembley National
Stadium Ltd, the FA subsidiary in charge of the project, "had not adhered to
best procurement practices or corporate government arrangements" when it was
negotiating its deal with Multiplex.

On Tuesday, the culture secretary was handed a report by David James, the
troubleshooter brought in by the government to rescue the Millennium Dome,
raising worries about "a lack of transparency . . . and a failure to deal
properly with actual or potential conflicts of interests", she told MPs
yesterday.

Mr James' review, commissioned by WNSL, is understood to reflect criticisms made
at the time Multiplex won the contract. Ken Bates, chairman of WNSL when
Multiplex was awarded the Wembley contract, also awarded the construction
company a stadium expansion contract at Stamford Bridge, home to Chelsea
Football Club, which Mr Bates chairs. He is no longer involved in the national
stadium scheme.

Mr James' review found no evidence of "criminality or impropriety" in the
procurement process, but was "critical of the procurement process up to
September 2000", said WNSL. Mr Bates was last night considering his response to
the James inquiry and to Ms Jowell's comments. He declined to comment.

As well as commissioning the review, Ms Jowell has insisted that the FA and WNSL
clear three other hurdles before the Wembley deal is given the go-ahead. The
scrutiny is expected to take four months.

The government wants the National Audit Office, parliament's spending watchdog,
to analyse whether the Pounds 20m of public funds for transport links is money
well spent, and additional scrutiny of the financing. It is also thought to be
urging management changes at WNSL.

The choice of Wembley was endorsed in a report published yesterday by Patrick
Carter, the businessman appointed by ministers to examine the project.

Mr Carter told the Financial Times that Wembley had been chosen over Birmingham
because it offered better prospects for premium seat income.

He blamed the previous failure of the project to get off the ground on a
"muddled picture" over lines of responsibility. "People were very frank to us
that WNSL was unconvincing. The review was very clear they had to strengthen the
management."

He added: "One of the things the FA has had to do is take ownership of the
scheme and see it through, and it has responded to that. It now has 90 days or
so to get things tied down.

"If Wembley isn't taken to contract within that time, then Birmingham should be
considered."

Tim Yeo, shadow culture secretary, said: "Tessa Jowell has stoked the chaos and
confusion surrounding the national stadium to unprecedented levels."

Gerald Kaufman, chairman of the Commons culture committee, attacked the
government, describing the stadium as a "grubby and dodgy project in which the
Football Association has shown itself to be greedy in holding on to Pounds 120m
of public money to which it has no conceivable right". The FA had shown itself
to be "neither competent nor trustworthy", he said.

Troubleshooter turns his guns on the biggest challenges

David James is a man who relishes challenges. Pitch at him the Millennium Dome,
Railtrack, Wembley Stadium and he keeps coming back for more. And all this since
just last year, writes Scheherazade Daneshkhu.

At 64, an age when most people's thoughts turn to retirement, Mr James would be
happy to take on the high-profile disaster story of Railtrack after a gruelling
15 months sorting out the finances of the Dome.

Mr James has been working as an unpaid consultant for WestLB, the German bank
that has made an offer for Railtrack. If the bank succeeds, he would be made
chairman.

"I'm a serious trouble-shooter and you must go for the biggest," he said of the
attractions of Railtrack. "It's a matter of pride."

In his long career, Mr James helped MI6 unravel the Iraqi supergun affair after
one of his team uncovered suspect parts at a subsidiary of Eagle Trust, the
company that he was chairing. He was caught up in the 1986 US bombing raid on
Libya while negotiating the release of 12 British hostages who worked for a
subsidiary of Central & Sheerwood, an industrial holding company.

Other corporate missions have included helping to structure the rescue of the
Lloyd's of London insurance market and unwinding the global freight group LEP
with Pounds 750m of debts.

He accepted the daunting task of ensuring the Dome traded as a solvent company
with only three months trading left when he was appointed chairman in September
2000.

That job was discharged with confidence this week when the Dome was handed over
to liquidators at KPMG for a solvent wind-up, and Pounds 25m was handed back to
the Millennium Commission.

A workaholic bachelor, Mr James has a keen interest in the arts, horseracing and
cricket.

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                        Financial Times (London,England)

                           December 20, 2001 Thursday
                                London Edition 3

Mugabe brings in bills to outlaw dissent

BYLINE: By TONY HAWKINS

SECTION: MIDDLE EAST & AFRICA ; Pg. 11

LENGTH: 369 words

DATELINE: HARARE


Four bills being pushed through parliament in Harare have put paid to any chance
that Zimbabwe's presidential elections will be recognised internationally,
diplomats said yesterday.

They said the passage of the bills - the public order and security bill, the
information bill, and bills to amend the country's electoral laws and industrial
relations act - made free and fair elections impossible.

Jonathan Moyo, information minster, said he expected the bills to be passed
today. The speaker of parliament yesterday suspended standing orders so that the
legislation could be rushed through parliament before Christmas. This will allow
President Robert Mugabe to sign the bills into law before the election campaign
starts early in the new year.

The Public Order bill makes it an offence to criticise the president. It will
also be an offence to "excite people and express dissatisfaction" with the
president. Police will be able to arrest anyone found without an identity card
or passport.

Tawanda Hondora, chairman of Lawyers for Human Rights said "any party
campaigning in presidential elections that criticises Mr Mugabe could be
prosecuted under the new law and sentenced to a heavy fine, or 10 years in jail,
or both.

"The bill is far worse than any previous colonial legislation in this country or
in apartheid South Africa," he added.

The information bill makes it a criminal offence for a journalist, foreign or
local, to report on events in Zimbabwe, unless licensed to do so by a government
body.

The proposed amendment to the labour legislation bans strikes, while the changes
to the electoral laws will make it impossible to hold free elections, according
to the opposition Movement for Democratic Change.

Mr Mugabe has flown to Libya to renew the country's fuel supply agreement with
Muammer Gadaffi, the Libyan president. The agreement has largely ended the
country's fuel supply crisis. In August, Libya agreed to a Dollars 360m
revolving credit arrangement to supply Zimbabwe with the equivalent of Dollars
90m of oil every quarter.

The fact that the deal is being renegotiated at a time of warnings of fuel
shortages soon suggests Zimbabwe has not been able to pay on time.
www.ft.com/zimbabwe

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                        Financial Times (London,England)

                            December 17, 2001 Monday
                                London Edition 1

Bula denies any Libyan link NEWS DIGEST:

BYLINE: By GAUTAM MALKANI

SECTION: COMPANIES & FINANCE UK ; Pg. 24

LENGTH: 204 words


Bula denies any Libyan link

Bula Resources, the Irish oil company chaired by former Irish prime minister
Albert Reynolds, said a Libyan investment group with which it proposes placing
50m shares was not linked to the Libyan government.

The Dublin-based company had earlier described One Nine Investment
International, its new shareholder, as an investment arm of the Libyan
government.

However, in a statement to the Stock Exchange on Friday it said the investment
organisation should not be referred to as such.

Bula said the investment group was wholly owned by the Gaddafi International
Foundation for Charitable Associations, a non-governmental humanitarian
organisation based in Libya.

The foundation - of which Saif al-Islam Gaddafi, the Libyan leader's son, is
honorary chairman - entered the spotlight during last year's Philippines hostage
crisis when it helped organise a ransom payment that secured the release of
western hostages held by moslem rebels.

"One Nine has no connection whatsoever to any Libyan government entity or Libyan
individuals," the investment company said in a statement. "One Nine has intended
to acquire share equity in Bula but the deal has not been finalised," it added.
Gautam Malkani

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                        Financial Times (London,England)

                          December 12, 2001 Wednesday
                                London Edition 1

Libya buys stake in Bula Resources

SECTION: SHORTS ; Pg. 1

LENGTH: 34 words


Libya buys stake in Bula Resources

A foundation linked to Muammer Gaddafi, the Libyan leader, bought a stake in
Bula Resources, the Anglo-Irish oil company. Picture, Page 23; Libya takes
stake, Page 24

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                        Financial Times (London,England)

                          December 12, 2001 Wednesday
                                London Edition 1

Libya takes stake in Bula Resources

BYLINE: By GAUTAM MALKANI

SECTION: COMPANIES & FINANCE UK ; Pg. 24

LENGTH: 382 words


A foundation linked to Muammer Gaddafi, the Libyan leader, yesterday bought a
stake in Bula Resources, the Anglo-Irish oil company chaired by Albert Reynolds,
the former Irish prime minister.

The Dublin-based company said it had placed 50m new shares with One Nine
Investment International, an investment arm of the Libyan government.

One Nine is wholly owned by The Gaddafi International Charitable Foundation,
which is headed by Saif al-Islam Gaddafi, the Libyan leader's son.

The foundation entered the spotlight during last year's Philippines hostage
crisis when it helped organise a ransom payment that secured the release of
western hostages held by the Abu Sayyaf group of muslim rebels.

The investment marks a success in Bula's attempts to raise its profile in the
Middle East, with a particular focus on Libya and Iraq.

Bula has been trying to obtain exploration and production contracts in Libya for
the past five years after withdrawing from a disastrous foray into the former
Soviet Union.

The company, which is listed in Dublin and London, flagged Mr Reynolds'
experience of dealing with Libya when he was appointed chairman in 1999. "This
is an indication that confidence we've built up in the marketplace there is
coming to some fruition," said Tom Kelly, managing director.

He said only one western company had been granted acreage in Libya over recent
years, despite the suspension of United Nations sanctions in 1999 following the
handover of the Lockerbie suspects.

European oil groups, such as Agip-ENI of Italy, have enjoyed an advantage,
because US rivals are restricted from investing in Libya under US sanctions.

However, Mr Kelly stressed the investment did not signal the imminent granting
of any contracts. "It would be incorrect to say that we've production-sharing
contracts that are due to happen in the very near future," he said. "It was an
added bonus that an investment company in a country where we're trying to get
acreage has confidence in the company to invest in it."

One Nine bought its 2 per cent stake for about Euros 900,000 (Pounds 562,000).
Bula also placed a further 25m shares yesterday with O&M Management, a
Maltese-registered Libyan investment company. A further 2m shares were placed
with private investors, raising a total of Euros 1.38m.

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                        Financial Times (London,England)

                          December 12, 2001 Wednesday
                                London Edition 1

Compass in right direction

BYLINE: By PETER JOHN and RUTH SULLIVAN

SECTION: STOCK MARKETS LONDON STOCK EXCHANGE ; Pg. 48

LENGTH: 988 words


Compass group surged to the top of the FTSE 100 gainers on a day of positive
news, which included full-year results in line with analysts' expectations and
upbeat comments on the coming year. Shares leapt 42, or almost 9 per cent, to
512p.

The catering group also announced a ten-year contract with British Airways to
provide the airline's employee restaurant and vending services in the UK, and
said it is also buying Japanese food service group Seiyo Food Systems for Pounds
193m.

ABN Amro said its 2002 forecasts remain unchanged on the back of good figures
and reiterated its "buy" recommendation.

Elsewhere in the leisure sector, First Choice turned in solid full-year results
with profits before tax, goodwill and exceptionals at Pounds 79.6m, and reported
an encouraging outlook. WestLB Panmure said it believes the travel operator
offers significant upside in the next six months and kept its "outperform"
stance. The shares slipped 1 1/2 to 134p.

The latest review of winners and losers in the UK market takes place today and
is based on last night's closing prices. It is expected to decree that GKN
leaves the FTSE 100 and P&O Princess joins. GKN fell 4 to 285p and P&O rose 2 to
279p.

There are more interesting goings on lower down the table. Personal organiser
group Psion and Thus, the Scottish telecoms group, are expected to move back
into the FTSE 250. This will continue a rollercoaster ride which has seen them
move from the FTSE 100 to the midcap and then to the small cap and back up, all
in the course of 18 months.

Elsewhere, the success of discount airlines despite the fallout from the
September 11 attacks should reflect well on Ryanair. The Irish group is set to
enter the Eurotop 300 index. Retailers put in a robust performance partly on the
hope there would be a further interest rate cut in the US which would encourage
consumers to spend more before Christmas.

Kingfisher flies

General retailer Kingfisher raced ahead 14 to 391 3/4p in sympathy with a recent
strong performance by its France-based unit Castorama.

Great Universal Stores was supported by an upgrade by UBS Warburg, which raised
its price target to 735p from 700p and reiterated its "buy" stance on the stock.
Shares rose 7 to 658p.

Carpetright joined the list of fallers and succumbed to a run of profit-taking
after it delivered solid interims in line with analysts' forecasts with pre-tax
profit up 13 per cent. Shares fell 24 1/2 to 596 1/2p. ING Barings Charterhouse
Securities said the carpet retailer continued to trade well with a good pipeline
of new stores but said the high level of cost growth will make any upgrades
unlikely. The broker said it preferred other consumer durable home stocks such
as Homestyle and MFI, and reiterated its "hold" stance on Carpetright.

Investec Henderson Crosthwaite also maintained its "hold" recommendation and
said the company looks as if it is reaching a ceiling on its gross margin.

Barclays shares rose 12 to Pounds 21.32 after Goldman Sachs repeated its
"Recommended List" rating on the bank with a Pounds 25 target. It also raised
its current year EPS estimate to 153.7p from 153.4p and forecast that Barclays
would have doubled its economic profit between 1999 and 2003, with the group's
Barclays Capital expected to have shown a fivefold increase over the same
period. It values the bank at above Pounds 25 a share.

On the other hand, Abbey National fell 28 to 944p as Goldman Sachs removed the
stock from its "Recommended List" and downgraded its stance to "market
outperformer" with an Pounds 11 target.

Goldman said Abbey National's inexpensive valuation was no longer as compelling,
following the disclosure of higher provisions required at the wholesale bank and
retail banking revenues, which could well disappoint in 2002.

It cut its earnings forecasts for Abbey by 9 per cent in 2001, 5 per cent in
2002 and 2 per cent in 2003 to take into account likely higher write-offs in the
wholesale bank business.

HBOS down

HBOS dropped 10 to 808 1/2p despite news that the group will exceed its own
annual target for savings from the merger of Halifax and Bank of Scotland by
Pounds 70m.

Deutsche Bank reiterated its "buy" recommendation and 900p price target. It was
pleased that HBOS's statement contained no mention of exposure to Enron, the
collapsed US energy trading giant. Merrill Lynch said it might raise its current
year forecast by 3 per cent.

Dresdner Kleinwort Wasserstein repeated its "add" but Nomura reiterated its
"reduce", arguing that the positive effects of the statement would be
short-lived and the stock was fully valued.

Reckitt Benckiser gained 16 to 946p after positive comment from two brokers
following company visits.

West LB Panmure moved to "outperform" from "neutral", citing valuation grounds,
with the stock having underperformed the market by 20 per cent. The broker also
said that at a recent meeting, Reckitt's management was positive about the
outlook. UBS Warburg highlighted its "buy" stance and Pounds 11.70 price target
on the group after its own meeting with the company.

Oxford Glycosciences was the best performer in the FTSE 250, helped by news of a
collaboration deal with Atugen, a German biotech company. The shares closed a
net 72 1/2 higher at 717 1/2p.

The changes will be effective at the close of trading on December 21.

Bula Resources, the Irish exploration and production company, has secured a
strategic investment of around Pounds 500,000 from an investment group owned by
Colonel Muammer Gadaffi's International Charitable Foundation.

There is hope that, if the company has received the indirect backing of Libya's
leader, it will be in line for a development licence in the country.

However, insiders said the country's National Oil company maintains a strong
independent control over the licences and the tax regime is harsh. The shares
rose 25 per cent to 1 1/4p. Regular UK equities updates at www.ft.com/equities

LOAD-DATE: December 11, 2001

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                        Financial Times (London,England)

                           December 8, 2001 Saturday
                                London Edition 1

Fate of Taliban foreign fighters hangs in balance MERCENARIES:

BYLINE: By FINANCIAL TIMES STAFF

SECTION: ATTACK ON AFGHANISTAN MILITARY ; Pg. 6

LENGTH: 479 words


Under the Geneva conven-tion governing conduct in war, foreign fighters -
mercenaries - are entitled to the same fair treatment as other prisoners of war.
But, in practice, their motives are regarded with such contempt that their
predicament is often much worse.

The fate of the foreign fighters allied with the Taliban, many from Arab
countries, is even more problematic than other mercenaries'. Most are part of
Osama bin Laden's army of warriors, accused of the September 11 terror attacks
in the US - the al-Qaeda network the US is seeking to eliminate.

With the Taliban yesterday surrendering the southern city of Kandahar, their
last bastion, there were reports that Hamid Karzai, the designated leader of the
interim Afghan government, would grant amnesty only to Afghan Taliban fighters
and not foreign ones.

He said al-Qaeda members must face "international justice". Arab and Pakistani
analysts, however, warned that Arab fighters faced the prospect of being
massacred. Amnesty International, the human rights group, called for
"appropriate arrangements for the processing and protection of fighters who have
surrendered".

Reports of mass killings of Arabs and the deaths last week of Taliban and
foreign prisoners in a revolt at a fortress near the town of Mazar-e-Sharif led
Mary Robinson, the United Nations High Commissioner for Human Rights, to support
Amnesty's call for a UN or other independent enquiry.

Yesterday she said her staff in Afghanistan were already "mapping out patterns
of massacres" of prisoners elsewhere.

A Pakistani official said no Arab country had yet expressed any interest in
taking back its nationals. "The Arabs don't want their people coming back home
because they know this would be the first step towards trouble. In Pakistan, we
are certainly not going to take them because that would create trouble for us."

The only apparent help from Arab governments has come from maverick Libya.
According to a report in Al-Hayat, the London-based pan Arab daily, Libya this
week proposed to negotiate with the Taliban the surrender of Arab warriors and
their families, set up a camp for them in Quetta in Pakistan, then win an
amnesty from their countries of origin.

The collapsing Taliban, however, will have little say in the future of the Arab
fighters. Instead, this is an increasingly urgent question for the Bush
administration.

Donald Rumsfeld, US defence secretary, and other senior officials have suggested
their focus is on leaders of the al-Qaeda network. Mr Rumsfeld expressed
confidence on Thursday that any negotiated surrender of Taliban leaders in
Afghanistan would meet US interests. But he stopped short of demanding that
Taliban and al-Qaeda leaders be handed over to the US. Mr Rumsfeld suggested
that an al-Qaeda member from an Arab country such as Egypt or Saudi Arabia might
be sent back to that country for trial.

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                        Financial Times (London,England)

                           December 1, 2001 Saturday
                                London Edition 1

Watch out! There's a jihad about!: Cal McCrystal on Iran, Iraq and Saddam, plus
a selection of current books that offer insights into the Middle East

BYLINE: By CAL MCCRYSTAL

SECTION: BOOKS ; Pg. 4

LENGTH: 1220 words


One of the most difficultthings for both the writer and student of history, H.G.
Wells observed in The Outline of History, is to sustain the sense of
time-intervals "and prevent these ages becoming shortened by perspective in his
imagination". Addressing the same region in Neighbours, not Friends: Iraq and
Iran After the Gulf Wars (Routledge Pounds 12.99 / Dollars 19.95), Dilip Hiro
avoids the problem. Foreshortening doesn't get a look in here, partly because
his study is of much more recent events; but also because his chronological
torrent keeps it at bay.

His book is the last in a trilogy which explores Saddam Hussein's aggressive
exploits (the others being accounts of the Iran- Iraq conflict and the war that
followed Iraq's attempted annexation of Kuwait). Hiro's chronicle of all this
turmoil is exceedingly thorough, scrupulously balanced and dispassionate. In his
foray into a region possessing two-thirds of global petroleum reserves, he sings
no psalm and beats no drum. He lets known facts speak for themselves. This can
make for a dry read, in which a sense of place and personality is culled from
maps and recorded statements. But Hiro allows no impediment to our understanding
of how the US never gets things quite right in the Gulf.

Over the years, Washington came to perceive Saddam's rule as secular and
tolerable, "a stabilising influence in a region prone to volatility". The Iraqi
regime looked good, compared with, say, Syria (penniless, tied to Moscow),
Lebanon (wracked by a long and bloody civil war), Libya (manacled by a maniac),
Egypt (debt-ridden and bureaucratically sclerosed), or, in particular, Iran -
even after Khomeini's death. Further, Baghdad bought American agricultural
produce in vast quantities, gave American oil companies comfort and maintained a
strong and varied economy. Yet every American who had a reason to visit Baghdad
must have been aware that the US was smooching with a brutal tyranny. They chose
to ignore this until Saddam took his sadism into Kuwait. Hiro's introduction,
which picks up the threads of the two earlier books, explores the consequences
with a fastidious accumulation of detail that is both electrifying and
enlightening.

He lays before us the socio-political tapestries of Iraq and Iran after the
second Gulf War and illustrates how day-to-day handling of high-warp and
low-warp alters overall patterns into a seething picture. On to these images he
superimposes interesting questions, such as: why did the Americans not finish
Saddam off when they apparently had the chance? Because, the author explains,
the end of Saddam would have meant the fragmentation of Iraq, with the Shia
Muslim south adjoining Saudi Arabia and Kuwait, siding with Iran and enabling it
to extend its influence in the region. Such a scenario was anathema to both
Riyadh and Washington. Consequently, when Saddam's forces attacked Shia rebels
in March 1991, US forces did not intervene.

Much of the section on Iraq concerns United Nations inspections of Iraqi
munitions. Since we're talking about bulk stocks of mustard gas and sarin nerve
agents as well as nuclear elements - about which we all today have a heightened
awareness - this is the most gripping part of the book. A striking aspect is the
refusal of Arab countries, other than Kuwait and Saudi Arabia, to back a US
threat of military action to force Saddam to provide a full inventory of these
weapons and their factories. Another is the weird choreography between
inspection teams and Saddam's men. When an inspection team wrongfoots the Iraqis
by filming them removing material from a military base in Falluja, for example,
the Iraqis dispatch 100 truckloads of material essentials of their nuclear
programme to the Tikrit area for storage at the presidential farms.

When the western powers do retaliate, Saddam gains politically at home. "The
Western attacks in the southern no-fly zone and outside distracted Iraqis from
their daily hardship," the author says. "Instead of blaming Saddam, they rallied
around him in the face of renewed US bombing, and began blaming the Western
powers' intransigence rather than their own government's behaviour for their
economic plight."

There follows a valuable analysis of the impact of sanctions under Clinton.
Among regrettably few instances of intimate disclosure in the book, one concerns
the calamitous collapse of the Iraqi Dinar. Nuha al Radi confides to her diary:
"Dinner at the Hatra Hotel; nouvelle cuisine - five bits of very charcoaled
meat, three slices of tomato and three small triangles of bread for 4,000
Dinars. My Toyota Corona cost that much in 1981."

And the impotence of the CIA to organise a coup against Saddam, and US failure
even to curb his military adventures into the Kurdish north and Shia south,
provide serious food for thought.

Meanwhile, Saddam was chatting up his old enemies the Iranians. Hiro's equally
compelling section on Iran depicts a nation which has gained from its
neighbour's loss: a high international profile, soaring oil revenues, low
inflation. Yet neither antipathy towards Iran's neighbour nor a growing trend
against clerical fanaticism in Tehran has caused Washington to radiate much
warmth towards the mullahs, even after the growth of a significant reform
movement and the conciliatory nature of Iran's leader Hojatalislam Muhammad
Khatami. By Hiro's account, American caution is well justified, its past
experiences being comparable with a puppy's overtures to a couple of porcupines.
For the moment, it's "Watch out! There's a jihad about!" * Bin Laden: Behind the
Mask of the Terrorist by Adam Robinson (Mainstream Pounds 7.99). Whisky? Women?
Sex clubs? Not quite the image of the Islamic hardliner - but this investigation
piles up the evidence of Osama's misspent youth in the fleshpots of pre-civil
war Beirut. And as for his lieutenants: al-Zawahiri a serial paedophile, Atta a
sexual deviant with a record of beating up prostitutes . . .It was Osama's
return to Saudi Arabia, and the Hajj to Mecca, that changed him (he gave away
his Mercedes SL 450) and the jihad against the Soviet forces in Afghanistan that
made him a celebrity. Once ousted from Saudi Arabia for troublemaking, he got
involved in producing two-thirds of the world's heroin. You know the rest. * Bin
Laden: The Man Who Declared War on America by Yossef Bodansky (Random House
Pounds 12.99/Prima Dollars 17.95). The same story, with a very different slant.
Bodansky's speciality is to unravel the secret pathways and networks that have
protected Bin Laden for so many years, enabling him to mobilise forces of terror
in dozens of countries. Bodansky paints in the background that radicalised the
quiet engineering student and engendered Bin Laden's visceral hatred of the
west. * The Concise Encyclopedia of Islam (new edition) by Cyril Glasse (Stacey
International Pounds 45) contains no entry for Bin Laden or for al-Qaeda, which
may put things in some perspective. The entry on jihad is instructive, though,
and altogether this is a balanced and rewarding book. * Taliban: The Story of
the Afghan Warlords by Ahmed Rashid (Pan Pounds 7.99/Yale Dollars 14.95).
Published last year to general acclaim, this thorough and credible account of
the rise of the Taliban is now reissued with a new, post-September 11 Foreword.

LOAD-DATE: November 30, 2001

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                        Financial Times (London,England)

                           November 27, 2001 Tuesday
                                London Edition 1

How a stranger can minimise danger: SECURITY: Sensible travellers can enjoy
better protection from crime in a foreign land than the people who live there,
suggest Amon Cohen

BYLINE: By AMON COHEN

SECTION: INSIDE TRACK BUSINESS TRAVEL ; Pg. 20

LENGTH: 676 words


Concerns about the safety of business travellers and expatriate workers have
focused in recent weeks on the threat of Islamist terrorism. This year's RiskMap
report, published by overseas security consultancy Control Risks Group, makes
clear that security is deteriorating worldwide even without this particular
worry.

Crime rates, especially involving violence, are spiralling in many countries.
Kidnapping is becoming more of a problem. Those countries with fewer security
problems are registering rises in petty crime, albeit from a much lower base.
Even the more firmly policed states of Cuba and Libya are not immune. CRG
reports a small but growing number of armed robberies in both.

CRG generally links worsening security to the downturn in economic conditions
around the world. "Argentina's problems are directly related to its economy,"
says Paul Doran, senior analyst for Latin America at CRG. "It was always
considered one of the safest countries in Latin America and to a large extent it
still is but it is experiencing an increase in opportunistic kidnappings."

In spite of the gloomy conclusions of the study, Christopher Grose, CRG
director, urges travellers not to be deterred from visiting developing countries
as they will usually be well insulated from the problems around them. "The
people who are going to have to deal with increased crime are residents," he
says. "Business travellers have layers of protection, especially if they stay in
reputable hotels. It is only when they leave those layers, such as by letting
people they don't know into their room or rushing on to the street to hail a
taxi, that they expose themselves to significant risks. If they follow sensible
guidelines, rising crime in the country they are visiting should affect them
minimally."

As always, good intelligence is vital in unfamiliar locations. In Colombia, for
instance, kidnappers specifically target foreigners; in Brazil and Mexico, they
tend to avoid them because they think locals are more likely to meet ransom
demands quickly.

It is a mistake to treat Middle East countries as one homogeneous, hostile
entity simply because of the preponderance of Muslims. "Across the region, risk
is not as high as popularly imagined," says Josh Mandel, CRG Middle East
analyst. "It is higher than normal but by no means critical."

That said, risk assessment in the Middle East would change drastically if the US
engaged in military action outside Afghanistan. At the moment this is a move
being urged by only a few on a hawkish fringe but bags would have to be packed
quickly if they did prevail.

It is in the west, according to CRG, that business travellers should become more
aware of the threat of terrorism. CRG warns of a credible risk of attacks in the
US, Belgium, France, Germany, Italy and the UK. It also believes it would be
possible for terrorists to attempt further seizures of aircraft to use as guided
missiles on the grounds that al-Qaeda may still have links to further trained
pilots. "An increase in airport and airline security has reduced, but not
removed, the risk of further successful attacks," says CRG.

Given some shocking failures in security since September 11, this is plausible.
In one instance in the US, a sheepish passenger surrendered his handgun to a
cabin attendant after opening his briefcase in mid-flight and discovering he had
forgotten to remove it before leaving home.

The risk of a terrorist strike on any specific flight or fixed western target
is, in fact, so small that most business people will not be deterred from
travelling.

Also in the west, the CRG entry for the UK points out, for instance, that
"levels of street crime will remain higher than in most other west European
countries." The UK has also seen the highest incidence credit card skimming.
This is the appropriation of a credit cardholder's details - in a restaurant,
for example - to forge a dummy card that is used to make several high-value
purchases in a different country. RiskMap 2002 is available from Control Risks
Group. www.crg.com.

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                        Financial Times (London,England)

                           November 27, 2001 Tuesday
                                London Edition 1

Fighting terrorism first, multilateralism second: While Europe fusses about
biological weapons treaties and the rights of terrorists, America is acting

BYLINE: By AMITY SHLAES

SECTION: COMMENT & ANALYSIS ; Pg. 27

LENGTH: 931 words


The mood towards the US among its allies has shifted. Where before Europe was
ready to supply unstinting support - "We are all Americans now" - today there is
hesitation and, behind closed doors, even some scolding.

When it needed the allies, the US called on continental Europe and the UK to
join it in its new war. But now America is accused of behaving like a cowboy -
reverting to "the old Bush 'up yours' unilateralism," as The Guardian put it.
America is not doing its part to support great multilateral causes ranging from
biological weapons diplomacy to international justice for terrorists.

But the trouble with multilateralism is that it has become a game - a game for
its own sake. Multilateral institutions are, after all, only as good as the goal
they serve. And at this crucial moment, that goal is ending the global threat
that gave us September 11.

Seen in this context, US departures from various multilateral agendas cease to
look like cowboy antics. Rather they represent leadership that can make the
world safer, including for the nations doing the scolding.

Take a security issue at the top of the mind of many citizens of Western
nations: germ warfare. This month, at a conference of the 1972 Biological
Weapons Convention in Geneva, the US renewed its objections to a new draft for
the treaty. John Bolton, the State Department's under-secretary for arms control
and international security, pointed out that the treaty had not prevented
signatory nations from developing biological weapons. Instead, the treaty had
afforded a cover to nations that continued to mill anthrax.

So, Mr Bolton said, will the new protocol. That is because it does not contain
any effective means for verifying whether signatory nations are keeping their
word. The plan requires advance notice, allowing laboratories there to conceal
their work.

Additionally, the US said that Iraq, a 1972 signatory, "developed, produced and
stockpiled biological warfare agents and weapons and continued this activity
even after ratifying the (biological weapons convention) in 1991". It took
advantage of the absence of United Nations inspectors since 1998 to continue
such work. Iraq denied it, a statement carried all over the world.

The US also pointed a finger at North Korea's Kim Jong-il and was backed by
South Korea's defence minister, who has announced that Pyongyang now controls as
much as 5,000 tonnes of biological and chemical weapons. Tehran and Libya, the
US said, are also developing biological weapons. Syria "may be capable of
producing small quantities of an agent" and there is disturbing evidence about
Sudan.

To deter scientists and their masters from developing such weapons in future,
the US wants the treaty to require signatories to prosecute those in their
countries who work in germ warfare laboratories. It has also called for a new
international code of conduct for all scientists and monitoring of individual
scientists.

By ostentatiously listing signatory offenders, America has cast doubt on whether
reliance on the treaty alone can prevent rogue nations from fortifying their
germ arsenals. One might think that European governments would side vociferously
with the US on this issue. After all, last week brought news of another case of
inhalation anthrax involving a woman in Connecticut.

A reminder of the futility of the biological weapons convention also came with
news of the death of Vladimir Pasechnik, a former official in the Soviet Union's
germ warfare programme. After his defection to the west, Mr Pasechnik said he
never knew his research violated the Soviet Union's legal commitment not to
engage in such work.

Yet when the Iraqi regime objected to the US claim, European governments kept
silent, or isolated the US by accusing it behind closed doors of being
"counterproductive". The same habit - favouring multilateralismper se over the
recognition of bitter realities - is showing up in other arenas. A Spanish judge
announced that Spain would not hand over suspected terrorists to the US for
trial unless it promised not to try them under military tribunals, or to subject
them to the death penalty. If the US did not agree, the implication was, it was
not measuring up to the new global standard on human rights, as embodied in such
multilateral documents as the European convention on human rights. The truth is
that this would slow down the US in what everyone says is crucial work: bringing
terrorists to justice.

Cowboy has become code for "dumb Republican"; implicit in the scolding of the US
cowboy is the argument that the Clinton administration played the multilateral
game better. This is true, insofar as that administration took greater pains not
to upset others. It did not name names (aside from Iraq) at weapons convention
meetings. But this focuson finesse failed to prevent rogue states from building
up their stockpiles.

It may well be that there are motives for the new scolding. The US is weighing
seriously toppling Saddam Hussein, germ war factories and all, and Britain may
not want to go along. The Spanish government may value its opposition to the
death penalty more highly than pursuing terrorists. But neither of these goals
has much to do with multilateralism.

For its part, the US does not have the luxury of fussing about diplomacy; it
must proceed as best it can, for it was Osama bin Laden's initial target. When
Europe hurts the US it also hurts itself, because it makes its own citizens more
vulnerable to future terror attacks. When we support multilateralism for its own
sake, we all lose.

amity.shlaes@ft.com

LOAD-DATE: November 26, 2001

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                        Financial Times (London,England)

                            November 23, 2001 Friday
                                London Edition 1

A solo performer by nature: The war on terrorism has obliged the US to engage
more fully with the rest of the world. But its instincts remain unilateralist

BYLINE: By PHILIP STEPHENS

SECTION: COMMENT & ANALYSIS ; Pg. 21

LENGTH: 1097 words


Welcome back. So chorused America's allies as the grim aftermath of September 11
saw the US return to the international community. A quickening drift to
unilateralism had been halted. Washington had reawoken to its vulnerabilities
and, with them, to its responsibilities as the sole superpower. It re-engaged in
the Middle East, paid its outstanding dues to the United Nations and thawed
relations with Russia and China. Let's not celebrate too soon.

That US foreign policy has changed there can be no argument. George W. Bush,
elected on a platform of America first, has been obliged to make the war on
international terrorism the lodestar of his presidency. For that he needs
friends. The administration that scorned Bill Clinton's foreign policy activism
finds that it too cannot ignore disorder and chaos on the other side of the
world. The distant complexities of America's national interest are back in
focus. To stand aside in the conflict between Israel and the Palestinians is to
jeopardise US strategic interests throughout the region. To ignore the dispute
between India and Pakistan over Kashmir is to acquiesce in the spread of
terrorism.

These new perspectives have been met with unvarnished enthusiasm in Europe. Tony
Blair has been candid about the purpose of his tireless advocacy for the US-led
coalition in Afghanistan. Britain's interest lies in cementing the shift in US
policy to bind Mr Bush into a new system of international relations. Diplomats
speak of a breakthrough. Transatlantic conversations deemed impossible before
September 11 are now a commonplace.

This change was born of military as much as political necessity. The unexpected
speed of the Taliban's collapse has attracted much comment about America's
military might. Bombing works. Well, it works when combined with the awesome
technology that only the US can deploy - total surveillance, missiles fired
through doorways by unmanned Predator aircraft, interception of the enemy's
every telephone call and radio transmission, bombs that bust the deepest
bunkers. How could anyone have doubted the Pentagon's ability to win this war?

Dazzling though it is, the lethal technology tells only half the story. The war
has shown the US to be as dependent on others as it is singularly powerful. To
deploy all this weaponry, it needed friends, lots of them. Washington has relied
on the support or acquiescence of more than half-a-dozen states. It needed
military bases in Pakistan, Uzbekistan, Tajikistan and Turkey; a command and
control centre in Saudi Arabia; permission to overfly Iran; support from Russia
and China; the use of the British territory of Diego Garcia. There have been
extraordinary discussions with Beijing about mounting search and rescue
operations from Chinese soil. And for all its satellites and spy planes, the US
has solicited intelligence from regimes as unlikely as Libya. There is a message
here. Even the superpower cannot wage war from aircraft carriers.

Engagement and coalition-building, though, do not meet the European definition
of multilateralism. As Mr Bush contemplates the prospect of a speedy victory in
Afghanistan, we can already see the emerging differences about the scope and
scale of America's new role. From Washington we hear that the US must not be
constrained in its war against terrorism by global entanglements. It is as
reluctant now as it ever was before September 11 to submit to international
jurisdictions. It jealously guards its freedom of action.

The hawks around Mr Bush argue too that it cannot be deflected from the war
against terrorism by the task of nation-building in Afghanistan. America fights
the wars; others can make the peace. The US cause is righteous. So it can ask of
its friends help without hindrance, co-operation without constraint. As Mr Bush
himself put it in his address to the UN, the "urgent and binding obligation" to
stand alongside the US is non-negotiable. Few echoes here of Mr Blair's
Gladstonian vision of a new global order. Nor of Franklin Roosevelt's postwar
determination to embed America's security in a durable framework of
international co-operation.

So Washington signals its continuing hostility to a host of multilateral
treaties and protocols it has lately scorned. This week John Bolton, an
under-secretary of state, summarised the administration's approach to
multilateral arms control. Mr Bolton pronounced a new protocol designed to give
teeth to the 1972 Biological Weapons Convention as, quite simply, "dead".

So too, it seems, remains any hope of US participation in the Comprehensive Test
Ban Treaty or in agreements barring the use of landmines or imposing controls on
arms exports. Beyond the field of security, Mr Bush will not change his mind on
the Kyoto climate change treaty or the International Criminal Court. Treaties
equal intrusion.

Contrast that with the European instinct. Here governments have few hang-ups
about pooling sovereignty in the cause of greater security or a cleaner world.
They do it every day in the European Union. The links, or rather the constant
overlaps, between foreign policy and domestic politics are already part of
everyday life. Interdependence is a fact. So European leaders take
multilateralism to mean partnership, not ad hoc coalitions of the willing.

Optimists among these leaders will tell you that it was never expected that Mr
Bush would make a giant leap in a few short months. US conservatives will always
feel uneasy about signing up to treaties and protocols that constrain the
nation's capacity to run its own affairs. But the pressures, these optimists
add, are all in the right direction.

Winning in Afghanistan will not free America of the need for allies. Quite the
opposite. The "soft war" on terrorism - fought by intelligence communities,
financial authorities and law enforcement agencies - requires still more of
allies. Effective action against the proliferation of weapons of mass
destruction is possible only through collective effort. The US national interest
will demand that it be more attentive to the sensibilities of others. Step by
step, Mr Bush will be pulled along the path that leads from engagement to
multilateralism.

There is something in all of this. But behind it lies an unspoken fear. Victory
in Afghanistan may embolden the US. Triumphalism could yield to temptation.
Flushed with success in killing Osama bin Laden, Mr Bush might listen to his
hawks and go after Iraq's Saddam Hussein. Nothing is yet decided. But that in
itself tells you why the applause has been premature.

philip.stephens@ft.com

LOAD-DATE: November 22, 2001

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                        Financial Times (London,England)

                           November 20, 2001 Tuesday
                                London Edition 2

US names and shames on bioweapons GERM WARFARE WASHINGTON DENOUNCES SIX
COUNTRIES ACCUSED OF HAVING OR SEEKING SUCH WEAPONS:

BYLINE: By FRANCES WILLIAMS

SECTION: ATTACK ON AFGHANISTAN INVESTIGATION & ECONOMY ; Pg. 10

LENGTH: 402 words

DATELINE: GENEVA


The US yesterday took the unusual step of publicly denouncing six countries -
Iraq, North Korea, Iran, Libya, Syria and Sudan - for having or seeking to
acquire biological weapons. The move came as it sought to build support for
proposals by the Bush administration to strengthen a 1972 United Nations
bioweapons treaty.

John Bolton, undersecretary of state for arms control at the US State
Department, told the opening session of the fifth treaty review conference in
Geneva that Washington was extremely concerned about violations of the 1972
convention by some signatories, and by the potential use of germ weapons by
terrorist groups and states that supported them.

"So I plan to name names. Prior to September 11, some would have avoided this
approach. The world has changed, however, and so must our business-as-usual
approach," Mr Bolton said.

Iraq, North Korea, Iran and Libya have all ratified the UN convention which bans
the development, producing, stockpiling and acquisition of biological and toxin
weapons. Their use is outlawed by the 1925 Geneva protocol.

The US Central Intelligence Agency has previously pointed the finger at several
other countries suspected of having biological weapons programmes, including
India and Pakistan. Mr Bolton said other countries were being contacted
"privately".

The US is using the "naming and shaming" of states alleged to be violating the
biological weapons treaty to justify its withdrawal last summer from talks on an
anti-cheating protocol, and to garner support for alternative proposals Mr
Bolton put before the conference yesterday.

Mr Bolton said the draft protocol, which was due to have been approved at the
review conference, would not have stopped these violations or bioterrorism by
groups such as al-Qaeda.

The US proposals, which Washington hopes will be adopted by the conference,
include national laws to criminalise bioweapons activities and strengthen
controls on pathogenic materials.

The US has also suggested putting international investigations of suspected
biological weapons activity under the authority of the UN secretary-general. Mr
Bolton acknowledged yesterday that such investigations would need approval by
the Security Council where the US, Russia, China, UK and France, wield a veto.

However, other countries criticised the US for abandoning the verification talks
and said they wanted multilateral negotiations to continue.

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                        Financial Times (London,England)

                          November 14, 2001 Wednesday
                                London Edition 1

Libya blamed over 1980s bombing

SECTION: SHORTS ; Pg. 1

LENGTH: 25 words


Libya blamed over 1980s bombing

A German court said Libya was largely to blame for a 1986 Berlin disco bombing
that killed three people. Page 12

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                        Financial Times (London,England)

                          November 14, 2001 Wednesday
                                London Edition 1

Libya blamed for 1986 Berlin disco bombing

BYLINE: By HUGH WILLIAMSON

SECTION: EUROPE ; Pg. 12

LENGTH: 452 words

DATELINE: BERLIN


A German regional court yesterday said Libya was largely to blame for a bomb
explosion in a Berlin disco in 1986 that killed three people and heightened
tensions at the time between Tripoli and the west.

In a ruling with significance for the US-led campaign against terrorism, the
Berlin court found four people guilty of involvement in planting the bomb on
April 5 1986 in La Belle disco in the then West Berlin. The nightclub was
frequented by US military personnel. Some 230 people were injured in the
explosion.

A German woman found guilty of murder was sentenced to 14 years in prison while
a Palestinian, a Libyan and a Lebanese-born German were sentenced to between 12
and 14 years for attempted murder. A fifth person was acquitted.

Judge Peter Marhofer said in a statement that "the court was convinced that the
Libyan state was at least to a large extent responsible" for the disco attack.
He said it was "planned by members of the Libyan secret service in senior
positions in the Libyan (embassy) in East Berlin". He added that the four people
found guilty had been manipulated by the Libyans into planting the bomb.

Detlev Mehlis, the chief prosecutor, declared before the verdict that proving
his charge of Libyan state terrorism would strengthen the signal - important
after the September 11 attacks - that the sponsors of terrorism would not go
unpunished.

Despite pointing the blame at Tripoli, the judge complained that "the limited
willingness" of the German and US governments to share intelligence had
prevented the court from establishing whether Libyan leader Muammer Gadaffi had
ordered the attack. He said this was one of the "disappointments" of the trial.

The trial, which started in November 1997, 11 years after the attack, was made
possible by German re-unification and the opening of East German secret service
files. The names of the accused were found in these files.

The attack was seen as revenge by Libya against the US, which had earlier sunk
two Libyan ships in the Mediterranean. Former US president Ronald Reagan
launched air raids against Tripoli and other Libyan targets 10 days after the
Berlin explosion. Libya was later blamed for the attack in 1988 on an airliner
over Lockerbie, Scotland, that killed 270 people.

The German government yesterday welcomed the verdict and, noting a "change in
Libyan politics" in recent years, called on Tripoli to pay compensation to the
victims. The Libyan embassy refused to comment on the verdict.

The La Belle case triggered tensions in Germany earlier this year when a leaked
government memo suggested the Berlin government had known that Mr Gadaffi was
responsible for the attack without telling lawyers involved in the case.

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                        Financial Times (London,England)

                          November 14, 2001 Wednesday
                                 USA Edition 2

Unwitting sponsors of terrorist training camps

BYLINE: By PROF ROBERT KROL

SECTION: LETTERS TO THE EDITOR ; Pg. 14

LENGTH: 503 words


From Prof Robert Krol.

Sir, The Bush administration's financial war against terrorism has frozen
Dollars 24m in private assets belonging to individuals and organisations that
fund terrorist activities. While this is an important first step, the financial
campaign must be expanded to include development assistance to states that
sponsor terrorism. Foreign development assistance cannot be overlooked because
it is fungible; dollars targeted at education or healthcare end up financing
terrorism.

The State Department currently classifies seven countries as sponsors of
terrorism (Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria). Yet members
of the international coalition against terrorism provide development assistance
to them. The Organisation of Economic Co-operation and Development reports that
official development assistance to the seven countries identified as sponsors of
terrorism totalled Dollars 974m in 1999. Iran received Dollars 161m, Iraq
Dollars 76m. Syria benefited from Dollars 228m in development assistance.
Afghanistan, not officially labelled a sponsor of terrorism, received Dollars
142m in assistance during 1999. In 1999, Germany was the number one donor of
development assistance to both Iran and Iraq, providing Dollars 65m and Dollars
23m, respectively, to these countries. Japan topped the list of aid donors to
Syria at Dollars 93m. The US itself was the third largest contributor to
Afghanistan at Dollars 16m, behind the European Commission and the Netherlands.

The providers of international development assistance have the best of
intentions. Financial aid is directed to road construction, improving education
and providing much-needed health services to the poorest in the world. By
targeting the aid, rather than providing an unrestricted grant, donor countries
attempt to ensure that funds are used in a way that promotes economic
development. However, because aid is fungible, donors end up financing
government activities that do not help the poor - unwittingly becoming sponsors
of terrorist training camps. Countries that receive millions of dollars in aid
for education can shift revenues from domestic tax sources away from education
towards military expenditures and terrorist activities. The recipient government
can use the additional funds any way it wants. A recent World Bank report,
Assessing Aid, documents the fungible nature of development assistance. Targeted
financial aid has the same effect on government spending as an unrestricted
grant.

The international coalition against terrorism needs to take a hard look at the
potential for development assistance to be used as a source of funding for
terrorists. It is an increasingly attractive source of funds for financing
terrorism. For all countries, co-operation in the war against terrorism should
be a condition for development assistance. We must sever every financial artery
feeding the global terrorist network.

Robert Krol, Department of Economics, California State University, CA 91330, US

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                        Financial Times (London,England)

                            November 12, 2001 Monday
                                London Edition 2

Businesses urged to press on with overseas trade trips

BYLINE: By JIM PICKARD

SECTION: NATIONAL NEWS ; Pg. 3

LENGTH: 207 words


The government insists that it is business as usual for trade missions to the
Middle East, central Asia and north Africa, despite one cancellation and a
postponement.

A trip to Israel, scheduled for September, has been postponed until March, and a
mission to Libya has been cancelled.

There has also been a drop in the number of business people joining
government-organised visits, according to Trade Partners UK, the public body
that organises them.

But the group urged industry leaders to join the trips, which are arranged to
stimulate trade deals between different countries. "From what we can see, they
are continuing with confidence, it does not seem to be affecting business at
all," it said.

Each trade mission had seen a handful of managers dropping out, because it had
become more difficult to obtain insurance for such travel. "If you are flying
close to a war zone your insurance company will not be so keen to insure you,"
said Trade Partners UK.

Companies have been advised to take advice from the Foreign Office's website
when their staff are travelling abroad. Unilever, the international consumer
goods giant, has pulled several expatriate staff out of Karachi, Pakistan.
Otherwise disruption had been minimal, it said.

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                        Financial Times (London,England)

                           November 8, 2001 Thursday
                                London Edition 1

Aid workers still in Kabul prison

BYLINE: By HUGH WILLIAMSON

SECTION: ATTACK ON AFGHANISTAN: MILITARY STRIKES & DIPLOMACY ; Pg. 8

LENGTH: 91 words

DATELINE: BERLIN



The son of Muammar al Gaddafi, Libya's leader, claimed yesterday that
Afghanistan had asked for Libya's help in mediating the release of eight
international aid workers held in prison in Kabul since August, Hugh Williamson
reports from Berlin.

Saif al-Islam Gaddafi told a German newspaper that Afghanistan's Taliban regime
had requested Libyan assistance before the September 11 terrorist attacks on the
US. Eight aid workers from Shelter Now, an international charity, including four
Germans, were arrested on August 3 for promoting Christianity.


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                        Financial Times (London,England)

                            November 5, 2001 Monday
                                London Edition 1

Soco in link with Libyan oil interests

BYLINE: By DAVID BUCHAN

SECTION: COMPANIES & FINANCE UK ; Pg. 24

LENGTH: 371 words


Soco International has formed an exploration joint venture with Libyan
interests, despite US sanctions barring the top Americans in the UK-quoted
company from dealing directly with the oil-rich North African state.

To overcome this political barrier, Soco has set up a subsidiary, Soco North
Africa, to take a 43 per cent stake in Odex Exploration, its joint venture with
Oil invest. The latter is a private Dutch holding company held 45 per cent by
the Libyan state oil company and trade bank.

After selling its Russian assets for Dollars 50m (Pounds 34m) in a deal
completed last week, Soco had signalled its intention to look for oil that was
cheaper and easier to exploit in North Africa and the Middle East. The switch
has been likely ever since the Toro group of Middle East energy investors became
Soco's largest shareholder, with 29 per cent, a couple of years ago.

Rui de Souza, the Portuguese head of the Toro investors group and a
non-executive director of Soco, said he would take charge of Soco North Africa's
interest in Odex, along with Soco's Canadian head of operations. This is
designed to screen Soco's two top Americans - Ed Story, the chief executive and
Roger Cagle, the chief financial officer - from involvement in Libya. Odex will
focus mainly on Libya "which is good for low risk exploration," said Mr de
Souza.

Mr de Souza said he thought it unlikely that Soco would take over any assets in
Libya belonging to four US oil companies forced to quit the North African
country by President Ronald Reagan in 1986 under sanctions.

Libya has since held the assets of Conoco, Amerada Hess, Marathon and Occidental
in trust, but recently gave the US companies a year to return or risk their
licences being given to others. In the new political context, "I don't think
there is really a deadline," for the US return, said Mr de Souza in an interview
last week.

Mr de Souza attributed Libya's interest in Soco to "technical experience" the UK
company had acquired working in difficult and inaccessible areas in Mongolia,
Yemen and Russia, and the fact that "we are a public source of capital". Odex is
the first upstream venture for Oilinvest, which is focused on downstream supply,
refining and marketing.

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                        Financial Times (London,England)

                            November 5, 2001 Monday
                                London Edition 1

US import curbs under fire

BYLINE: By ROGER BEALE - COMPILER

SECTION: FT GUIDE TO THE WEEK ; Pg. 44

LENGTH: 1101 words


The dispute settlement body of the World Trade Organisation meets in Geneva to
consider Canada's request for a WTO panel to investigate its complaint against
US duties on softwood timber, imposed after their bilateral pact expired this
year. The US may block the panel request today but cannot do so a second time.
WTO members are also due to adopt rulings against US restrictions on imports of
cotton yarn from Pakistan.

Terrorism talks

Abdelaziz Bouteflika, the Algerian president, is due to meet President George W.
Bush in the White House after attending the African-American business conference
in Philadelphia. Discussions are likely to centre on anti-terrorism measures -
several of the September 11 suicide hijackers are thought to have been Algerian.

Barcelona group

A Euro-Mediterranean conference of foreign ministers opens in Brussels under the
auspices of the Barcelona process, which seeks to promote co-operation between
the European Union and the countries of the Mediterranean basin. Representatives
of the Arab League are expected to attend and Libya has been invited to send an
observer, though it has not signed up to the 1995 Barcelona declaration on human
rights.

Healthy interest

About 400 healthcare policymakers and practitioners, including ministers from
the US, France, Mexico and the US, meet in Ottawa for a three-day conference on
measuring and improving health systems performance. According to the
Organisation for Economic Co-operation and Development, the conference sponsor,
healthcare now costs member governments nearly 10 per cent of gross domestic
product on average and many countries are using performance indicators to try to
judge value for money.

Going with a bang

Britons celebrate Guy Fawkes, or Bonfire Night, to commemorate the failure of a
Catholic plot to blow up the Houses of Parliament in 1605, by letting off
fireworks and burning effigies of Guido Fawkes, one of the conspirators.

Airline safety check

New precautions arising from the September 11 terrorist attacks in the US are
likely to be discussed when the air travel support and research organisations
the Flight Safety Foundation, the International Federation of Airworthiness and
the International Air Transport Association hold their annual safety seminar in
Athens (to November 8).

FT Survey

The environment.

TUESDAY 6

Spotlight on Ireland

European Union economics and finance ministers review Ireland's efforts to
control its budget and the economic consequences of the EU's ageing population
in what is likely to be a low-key monthly meeting, in Brussels. Didier Reynders,
the Belgian finance minister and representative of the EU's rotating presidency,
will report on the late Monday meeting of the 12-nation "eurogroup".

Building on success

At a ceremony at the historic citadel of Aleppo in Syria, the Aga Khan will
announce the nine recipients of the 2001 Aga Khan Award for Architecture, the
world's largest architectural award, worth Dollars 500,000. The award was
established in 1977 "to identify and encourage building concepts that
successfully address the needs and aspirations of Islamic societies". This
year's awards range from a poultry farm school in Guinea to a hotel in Langkawi,
Malaysia.

Holiday

Tajikistan.

FT Survey

Private equity - the buy-out market.

WEDNESDAY 7

State of the world

The United Nations Population Fund releases its 2001 report on the state of the
world's population, this year focusing on the environmental impact of population
growth. UNFPA, which is based in New York, is projecting a 50 per cent increase
in population from 6.1bn in mid-2001 to 9.3bn by 2050, all of the growth coming
in developing countries. This growth will worsen pressure on water and food
supplies and exacerbate pollution, including global warming, the report says.

Concorde returns

British Airways is due to resume Concorde flights more than 15 months after the
supersonic airliner crashed near Paris, killing 113 people.

Holidays

Belarus; Russia.

FT Surveys

FT review of information technology; Qatar.

THURSDAY 8

Aegean partnership

Greek and Turkish businessmen hold a conference in Athens to promote bilateral
trade and investment. The meeting coincides with a working visit to Greece by
Ismail C em, Turkey's foreign minister, his second since the two Nato allies set
aside their quarrel over sovereignty in the Aegean sea in 1999. To highlight the
rapprochement, George Papandreou, the Greek foreign minister, will inaugurate an
exhibition of Mr C em's photography at the Benaki museum in Athens.

Going to Las Vegas

The annual conference of the Republican Governors Association is held in Las
Vegas (to November 10). The event comes two days after gubernatorial elections
across the US.

FRIDAY 9

WTO round talks

The World Trade Organisation opens its fourth ministerial meeting in Doha, Qatar
(to November 13). The meeting is due to decide whether to launch new trade
liberalisation negotiations but the substance has been somewhat overshadowed by
security concerns, which have prompted many would-be participants to pull out.
Even so, ministers from the WTO's 142 member countries are expected to attend.
China and Taiwan will also be there to see ministers put the seal of approval on
their terms of entry.

Action for the poor

The International Confederation of Free Trade Unions has declared this a global
day of action. It is calling for reforms to benefit the poor in developing
countries and the right to good-quality education and health services.

Holiday

Pakistan.

FT Survey

Islamic banking, finance and investment.

SATURDAY 10

Australian poll

Australians vote in federal parliament elections. Analysts are expecting a tough
election likely to be decided by marginal seats. The opposition Labor party
needs only a 0.8 per cent national swing from the last election in

1998, or six more seats in the 148-strong lower house, to take power. At the
last election the Liberal party of prime minister John Howard won 64 seats and
formed a government with the National party.

UN leaders debate

The United Nations General Assembly holds its annual debate of world leaders in
New York (to November 16), delayed from its original start date of September 24.

FT Survey

Wealth management.

SUNDAY 11

Bulgarian election

Presidential elections are held in Bulgaria. Petar Stoyanov is standing for
re-election for a second term, though as an independent rather than the
candidate of the Union of Democratic Forces. He is opposed by the current
vice-president, Todor Kavaldjiev, and Georgi Parvanov, chairman of the Socialist
party. Compiled by Roger Beale Fax 44 20 7873 3196

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                        Financial Times (London,England)

                            November 5, 2001 Monday
                                 USA Edition 1

Soco International

SECTION: SHORTS ; Pg. 1

LENGTH: 19 words


Soco International has formed an exploration joint venture with Libyan
interests, despite US sanctions. Page 18

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                        Financial Times (London,England)

                           October 27, 2001 Saturday
                                London Edition 1

Investigators puzzle over likely source: CONTAMINATION: Expertise in biowarfare
has become dispersed over the past 15 years, reports Victoria Griffith

BYLINE: By VICTORIA GRIFFITH

SECTION: ATTACK ON AFGHANISTAN ANTHRAX & INVESTIGATION ; Pg. 3

LENGTH: 626 words


As anthrax contamination multiplies across America, the question that
investigators are being pressed to answer is: where does this stuff come from?

But scientists are warning that identifying the source of the anthrax used in
the US is complicated because cultures of even the refined forms of the bacteria
are so widely dispersed. Between 100 and 250 American research laboratories are
thought to hold small samples, another 40 worldwide.

At least 12 US universities, including Harvard University, the University of
Michigan and the University of Texas, store vials of the bacteria, which they
use for research. Military laboratories such as Los Alamos and Fort Detrick hold
stocks, as do a number of US hospitals.

Until the 1970s, just a few countries had biowarfare programmes. Britain had
been a leader in the area until it cancelled its programme in the 1950s.

The US, whose research was led out of Fort Detrick, had started testing pathogen
dispersal techniques over the Pacific ocean when the programme was suspended in
1969.

The Soviet Union aggressively continued research in the area until the country's
disintegration.

Over the past 15 years, however, biowarfare expertise has dispersed widely. Ken
Alibek, a former director of the Soviet biowarfare programme who later defected
to the US, has warned repeatedly that Soviet scientists, suddenly finding
themselves out of work, could have sold information and even samples to hostile
governments.

Those nations may have developed expertise without Soviet help, however. In
Iraq, Saddam Hussein's government is believed to have purchased its first
anthrax culture from a mail order house in US in 1986. The list of nations
believed to have some biowarfare expertise is disturbingly long: Russia, Syria,
Iraq, Iran, Libya, both Koreas, Israel, Egypt, Cuba, Taiwan, China, Romania,
Bulgaria, Pakistan, India and South Africa. The extensive international trade in
pathogens means many of these countries probably carry the same strains.

If the anthrax used in the US attacks was procured domestically, officials may
have a chance of tracking it down. Since 1986, the federal Centres for Disease
Control have overseen the pathogen's purchase.

According to federal protocol, both buyer and seller must be approved; a Dollars
15,000 fee is required to buy anthrax. Detailed information on the proposed
research must be provided, as well as the names of any employees coming in
contact with the substance. "There are strict rules in the US about the transfer
of such agents," says William Dietrich, a leading anthrax researcher at Harvard
Medical School. "You need to register and report the exchange of material."

The anthrax contained in the letter to Senator Tom Daschle was potent. A
chemical - most likely bentonite - was added to reduce the electric charge of
the particles and stop them sticking together. Such treatment adds to the
particles' ability to float in the air, a characteristic that makes them more
likely to be inhaled.

Anthrax experts say the bacteria are not dangerous or difficult to work with,
and manipulating them does not require sophisticated equipment. "The trick is to
make sure you keep quantities low and that you keep it wet," says Phil Hanna, an
anthrax expert at the University of Michigan.

Anthrax researchers say they have been deeply affected by the attacks. They have
been forced to beef up security in their laboratories, adding guards and
limiting access to the bacteria. They also worry about replenishing their
cultures in the future. "I don't know if I'll every be able to get another
anthrax sample," says Mr Hanna. "I understand the new scrutiny, but I hope our
ability to conduct research is not affected." That research has now taken on a
new urgency.

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                        Financial Times (London,England)

                            October 23, 2001 Tuesday
                                London Edition 1

Russia's false promise: Robert Cottrell argues that long-term strategic
interests and internal pressures may undermine Vladimir Putin's pledges of
effective co-operation with the west and the anti-terrorist coalition:

BYLINE: By ROBERT COTTRELL

SECTION: COMMENT & ANALYSIS ; Pg. 26

LENGTH: 1322 words


Russia has played its hand well in these first weeks of the war against
terrorism, almost all commentators agree. President Vladimir Putin has offered
just enough co-operation to be counted as a full member of the US-led coalition
against the Taliban but not so much as to involve his country directly in
fighting within Afghanistan.

Mr Putin's latest token of good intent has been to indicate his willingness to
reach a new agreement on strategic arms reductions that would replace the 1972
anti-ballistic missile treaty. Such an agreement, which is likely to take some
time to negotiate, would remove one obstacle to the US's deploying its planned
missile defence system.

In exchange for such moves, Mr Putin has banked assurances of support for
Russia's accelerated entry into the World Trade Organisation and sympathy from
the west for Russia's war inChechnya. He has respected what Sergei Rogov, a
Russian political scientist, calls "an iron rule of politics: even when you do
something in your own interests, always ask your partners to do something for
you".

The attack on Afghanistan serves Russia's interests because Russia fears the
rise of militant Islam in central Asia more than any other foreign threat. It
blames the Taliban for helping Chechen rebels, its worst domestic threat. By
attacking the Taliban, the US is doing what Russia would like to have done
itself.

There is a risk that fighting may spill over into Tajikistan and Uzbekistan. If
it does, Russia will feel bound to intervene. There is also a risk that the US,
having traded favours with the governments of central Asia to win air corridors
and forward bases, may raise its profile permanently in the region and challenge
Russian influence there. But those things are outside Russia's control. For
Russia, this has been the easy bit.

The difficult bit is that the west's war against terrorism looks unlikely to
stop at the borders of Afghanistan. The US has redefined its foreign policy to
make anti-terrorism the over-riding long-term priority. It has hinted that other
targets may follow once the Taliban have been subdued. Its allies in the long
term will be countries willing to go on supporting its war efforts.

Here Russia's problems start. There is no other readily imaginable instance in
which the interests and instincts of Russia will coincide with those of the west
as neatly as in Afghanistan.

Iraq, Iran, North Korea, Libya and Syria, for example, are all countries viewed
by the US as state sponsors of terrorism. Russia views them as friends. If the
US launches attacks in any of these countries, says Alexei Arbatov, a Russian
politician and defence expert, it will alienate Russia as well as the Arab
world. "Another confrontation will ensue - between the west on one hand and
China and Russia on the other," says Mr Arbatov.

Not everyone agrees with him. "If the US attacked a terrorist camp in Iran we
would not say a word - not a word," insists one retired Russian intelligence
officer. But it would be an extraordinary feat by Mr Putin if he were able to
enforce that degree of restraint on the Russian political establishment.
Russia's foreign intelligence service, which has few illusions about the world,
might understand his logic. But most of its politicians, generals and
businessmen would not.

Russia's ties to the rogue states are based partly on political calculation. By
cultivating such countries, Russia shows independence and gains influence. But
hard cash is also a big factor. The rogue states and the rest of the developing
world are potential markets for Russia's arms and nuclear technology.

While Mr Putin was in Brussels this month talking about closer relations with
Nato, the defence minister of Iran was visiting Moscow and signing an agreement
likely to bring Russia Dollars 1.5bn (Pounds 1.05bn) in arms contracts over the
next five years. Russia is also building an Dollars 800m nuclear reactor for the
Bushehr power station in northern Iran and hoping for a contract to build a
second one.

It can only get harder now for Russia to persuade the US that this sort of trade
is innocuous. But, equally, it is hard to imagine Russia putting a stop to it.
"We believe the arms trade is the sovereign right of any country," said Sergei
Ivanov, Mr Putin's closest aide, in March. "We do not intend to lose (markets)
because the US does not like some country," he said. Mr Putin has since promoted
Mr Ivanov to defence minister and named him Russia's co-ordinator for
international anti-terrorist operations.

Nor is it only policy differences that may drive a wedge between Russia and the
west. Russia will also face practical problems in any sustained war against
terror ism. Whatever the intentions of its government, the Russian state lacks
the capacity to deliver in vital areas.

Russia's war in Chechnya epitomises its problems. Mr Putin himself insists that
the Chechen war is a struggle against international terrorists. Yet the men
Russia identifies as terrorist leaders - including Aslan Maskhadov, the Chechen
president, and the military commanders Shamil Basaev and Ibn-ul Khattab - have
operated for years under the nose of the Russian army.

This may be a failure of Russian intelligence, or of the army's capacity to make
use of the intelligence it is given. But either way it casts doubt on Russia's
ability to help the west catch terrorists elsewhere.

The physical devastation of Chechnya also makes horribly clear that pinpoint
strikes, sparing innocent civilians in the way modern anti-terrorist warfare
demands, are scarcely the Russian military's strong suit. There are no official
figures for civilian casualties in Chechnya over the years but they certainly
run into the tens of thousands. Therefore it may be no great loss to the western
effort that Russia is offering no troops for the war against terrorism, even
when the enemy is a common one such as the Taliban. Anatoly Kvashnin, chief of
the Russian general staff, dismissed that idea publicly before the US even
asked.

As a non-combatant overseas, Russia can make its contribution on the home front.
But here, too, the outlook is mixed. The fight against terrorism demands
sophisticated monitoring of communications, people and financial transactions.
The aim is to detect and prevent. But unless Russia's dozen or so secret
services are radically different from more visible branches of its public
services, they are poorly funded, poorly motivated, poorly managed and poorly
equipped.

They can also be bought and apparently sold fairly readily. "Officers of the
secret services are forced to seek additional work and, deliberately or not,
they make use of the operational capacities of their respective secret services
to resolve their own financial problems," said Nikolai Ryzhak, formerly a top
officer in military counter-intelligence, in a recent news-paper interview.

As for the policing of financial transactions, Russia's laws against
money-laundering are "clearly inadequate", Alexei Kudrin, the finance minister,
said last week. They will be strengthened but it is hard to see how any laws can
be made to stick as long as Russia has more than 1,000 licensed banks and little
in the way of banking supervision. Offshore companies and anonymity are the rule
in all large financial transactions. Indeed, the biggest deterrent to
money-laundering in Russia may well be the general lack of trust in the banking
system, which leads even the legitimately rich to hide cash elsewhere.

These limitations, practical and political, Mr Putin doubtless wants to change.
But change for the better is a slow process in Russia, especially when it
challenges the conservative instincts of the political establishment. "Russia
will have to be dragged screaming into rapprochement (with the west)", says
Vyacheslav Nikonov, head of the Politika Foundation, a think-tank. Can the west
trust Russia? Online discussion, www.ft.com/putinforum

LOAD-DATE: October 22, 2001

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                        Financial Times (London,England)

                           October 20, 2001 Saturday
                                London Edition 1

'Nothing to hide' at Milan Islamic centre named as al-Qaeda's European base
SUSPECTS:

BYLINE: By FRED KAPNER

SECTION: ATTACK ON AFGHANISTAN INVESTIGATION ; Pg. 4

LENGTH: 384 words

DATELINE: MILAN


From the outside there are no more hints that it is a Muslim centre for prayer
than there are indications that it is, according to the US Treasury, "the main
al-Qaeda station house in Europe". On the ground floor, there is an ill-lit
counter where a few men silently eat food served from a kitchen window. A
cramped grocery with one freezer full of chickens, a refrigerator and a counter
for honey-dipped cakes is tucked next to a stairwell.

Upstairs, there is a spacious prayer room, a room for cleansing feet, a store
for the sale of video cassettes and the Koran and a television room where half a
dozen men watch the al-Jazeera television channel or read Arabic newspapers.

Despite the suspicious glances of most at the centre when faced with a stranger,
Shaari Abdel Hamid, director of the institute, is anything but wary. The
54-year-old, an Italian citizen from Libya who came to study here 34 years ago,
says he and his institute have nothing to hide. But he makes a clear distinction
between the centre and the hundreds of people who come for prayer each Friday.

"That does not mean there might not be some people who are in some way linked to
illegality. But I can't know them. We are not a gentleman's club where people
sign in," says Mr Hamid. He says he did not know the two men arrested last week
in Milan on suspicion that they were linked to al-Qaeda.

Mr Hamid says the Euros 2,500 (Dollars 2,275, Pounds 1,570) monthly rent for the
institute is paid for with donations gathered during Friday prayers, and with
income from the restaurant and grocery store. The institute occasionally
receives Korans from Saudi Arabia but has never had any financial connections
with the country.

Enough money is also raised to support the institute's imam, Abu Emad, and his
family, according to Mr Hamid.

Imam Emad, a portly, baby-faced man, was imprisoned for six months in 1995 when
Italian police arrested 63 Egyptians in Milan suspected of being part of a
terrorist group. They were all released for lack of proof.

Italian police have kept the institute under observation since it was opened in
1988, Mr Hamid said, and it is quite likely that the secret services of Egypt,
Syria, Algeria and Tunisia have spies circulating at the institute and the two
other Muslim centres of prayer in Milan.

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                        Financial Times (London,England)

                           October 18, 2001 Thursday
                                London Edition 1

Multi-utility services and a square white box INTERVIEW FRANCO TATO, ENEL CHIEF
EXECUTIVE:

BYLINE: By JAMES BLITZ

SECTION: COMPANIES & FINANCE EUROPE ; Pg. 29

LENGTH: 714 words

DATELINE: ROME


Sitting in his plush office in the centre of Rome, Franco Tato, Enel chief
executive, starts talking about his "secret weapon".

For the past five years, Mr Tato, one of Italy's most colourful and
controversial business leaders, has been turning the huge state-owned
electricity giant into a multi-utility that also provides services in diverse
sectors such as telecommunications. "The box on this desk is critical to the way
we will deliver these services," he says.

The square white box is a digital electricity meter which will replace the
old-fashioned meters that have been sitting in some 29m Italian households for
decades. "From January, we will be installing 1m of these meters every month in
Italian homes at a total cost of Euros 1.8bn (Dollars 1.6bn)," he says.

Mr Tato will not say too much about what services he will provide. But his
multi-utility strategy has been much discussed by industry analysts.

Enel, which is 68 per cent owned by the Italian state, is the country's main
generator and distributor of electricity. Its Wind-Infostrada subsidiary has
also become Italy's second-biggest integrated telecommunications group. But in
some areas - such as its ambition to be a leading distributor of water services
- Enel has made limited headway.

This week, however, Mr Tato pulled off one important achievement: in gas
distribution. On Tuesday, Enel bought 40 per cent of Gruppo Camuzzi for Euros
434m from a Rotterdam-based holding company Mill Hill, with an option to buy the
remaining 60 per cent by the end of next year.

The move may seem modest. But Enel has been stealthily buying up more local gas
distribution companies and has purchased more than a dozen in the past year.
This means it is now the second largest gas distributor in Italy after Eni
subsidiary Italgas.

"We have more or less delivered to the market the pledge that we made to acquire
2m gas customers by 2005," says Mr Tato, drawing on a cigar. "And we are doing
it a little faster than we had promised."

Mr Tato has been determined to diversify Enel's operations for a long time. The
liberalisation of the Italian electricity market two years ago forced Enel to
sell off a chunk of its generating capacity, reducing earnings before interest,
tax, depreciation and amortisation by some Euros 2.8bn a year. The group
therefore had to hunt for alternative sources of revenue.

Mr Tato also took the view that the company would achieve limited returns by
acquiring power companies outside Italy, given the risks and the investment
costs.

Enel recently bought Spanish electricity company Viesgo for Euros 2.14bn. "But
generally speaking, we have chosen not to go around the world buying up
electricity assets."

Above all, however, Mr Tato believes that there are significant cost savings to
be made if Enel becomes a player in both electricity and gas. "The two are very,
very close," he says.

First, Enel will now be able to deliver combined gas and electricity services to
some 2m customers. "That means that you can have one call centre, one customer
base and we write one invoice for both services," he says.

Second, Enel - which uses natural gas to generate electricity - is now better
placed to reduce its cost of fuel. When it fully acquires Camuzzi, Enel will end
up procuring a total of 13bn cubic metres of gas a year. It wants to raise that
to 16bn cubic metres by 2005-2006 as it continues converting electricity
generation plants to more efficient combined cycle gas turbines.

The expansion into gas procurement is well under way. The group has already
signed contracts with Algeria, Libya and Russia for gas procurement through
pipelines.

It has signed a contract with Spanish group Gas Natural to build a gas
liquefication plant in Qatar. It is also seeking permission to build at least
one of three gasification plants in Italy (in Vado Ligure, Muggia and Taranto),
and is beginning negotiations with Algerian group Sonatrach for the building of
a new gas pipeline to the Italian coast.

The only note of concern is that the Italian treasury may ask Enel to pay up a
"special dividend" this year in order to help allay Italy's budget deficit
problems. "We are neutral on the subject," he says.

"But such a dividend . . . would simply leave less money to be spent on
investment."

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                        Financial Times (London,England)

                           October 18, 2001 Thursday
                                 USA Edition 2

Trade can fight terrorism: The approval of fast-track negotiating authority
would help to raise living standards among the world's poor, s:

BYLINE: By DAVID HALE

SECTION: COMMENT & ANALYSIS ; Pg. 15

LENGTH: 823 words


Many congressional Democrats resent the Bush administration's attempt to pursue
"fast-track" trade negotiating authority at a time of national emergency. They
are reluctant to make compromises on trade policy comparable with the ones they
may accept on tax and spending policy in order to cope with the war against
terrorism. But the administration is correct to link trade policy to the war
against terrorism, for two reasons.

First, there is a significant risk that the war could push the global economy
into recession. US consumers have become very cautious: the savings rate has
more than quadrupled since June. Companies are reluctant to invest when they are
uncertain about both the outlook for final demand and their future spending on
security. As with the pollution control expenditures of the 1970s, they could be
compelled to spend large sums on projects detrimental to profits and
productivity.

Furthermore, the US Customs Service has been carrying out the policy agenda of
the anti-globalisation movement by significantly inhibiting imports to the US at
the Canadian and Mexican borders, at airports and at the docks. As merchandise
imports are now equivalent to 36 per cent of the goods producing share of gross
domestic product, there could be a wave of inventory liquidation during the
fourth quarter, equivalent to 3-4 per cent of GDP.

Many Wall Street economists and media pundits are worried that the war against
terrorism could significantly retard globalisation. A decision by Congress to
enact fast-track trade negotiating authority for the president would have a
positive impact on global business confidence by demonstrating that the
terrorists cannot stop the globalisation process. A defeat, by contrast, would
reinforce current pessimism in the corporate sector and financial markets.

The second reason why Congress should enact fast-track trade negotiating
authority is to promote the creation of a global economy that will reduce the
likelihood of terrorism. The primary culprits in the tragic events of September
11 appear to be terrorists hostile to the US because of its traditional support
for Israel and its emergence as the world's superpower.

America's extraordinary success is the object of both envy and resentment.
Indeed, it has come at a time of unprecedented levels of income inequality and
poverty in the world. In the poorest countries, for example, people have incomes
of Dollars 100-Dollars 200 a year while in North America and western Europe per
capita annual incomes are Dollars 20,000-Dollars 30,000.

This huge income gap is not the sole force encouraging terrorism in the modern
world but it is an important contributing factor. Income inequality is a
particularly serious problem in the Middle East because most of the governments
in the region have done little to promote economic development and raise living
standards via foreign trade and investment. The rulers of Iraq, Syria, Libya,
Sudan and Afghanistan are obsessed with ideology and are indifferent to the
plight of their own people.

The great challenge today is to raise the living standards of the world's poor
and integrate them into the global economic system. True, there is a role for
international aid programmes to help bolster public investment and social
services in the poorest countries. But aid by itself cannot produce the economic
growth essential to creating a broad improvement in living standards.

The primary engine to achieve this is trade. Many developing countries in Asia,
Latin America and even Africa have achieved huge gains in real income during the
past three or four decades by becoming active participants in the global economy
through trade.

Trade has also played an important role in encouraging the spread of democracy
to the developing countries. As incomes rose in countries such as South Korea,
Taiwan and Thailand, people demanded an end to military rule and the
establishment of democratic forms of government. China's entry into the World
Trade Organisation is leading to such significant changes in its economy that
its political system will also become more open.

If the US is to offer the world's poor people any hope for material progress and
improving living standards, it has to set an example of openness by means of
policies that promote trade.

The events of September 11 were a profound tragedy in human terms but we should
now try to turn them into an opportunity for overcoming the protectionist and
isolationist political forces that have become so powerful in Washington in
recent years.

Either the US can promote an open global economy supportive of rising living
standards for all, or it can run the risk that terrorism will be arecurring form
of revenge by people who feel alienated and left behind by the tide of human
progress. Given the stakes, can there be any doubt which is the preferable
option?

The writer is chief global economist at Zurich Financial Services

LOAD-DATE: October 17, 2001

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                        Financial Times (London,England)

                            October 4, 2001 Thursday
                                London Edition 1

'Don't be scared into buying gas masks' BIOLOGICAL AND CHEMICAL THREATS:

BYLINE: By CHRISTOPHER PARKES

SECTION: FIGHT AGAINST TERROR POLITICS ; Pg. 2

LENGTH: 194 words

DATELINE: WASHINGTON


US citizens "should not be scared into buying gas masks" or taking similar
measures to protect themselves from biological or chemical terror attacks, Tommy
Thompson, health and human services secretary, said yesterday.

"There is nothing we know of that would warrant such actions," he told a Senate
appropriations subcommittee assembled to assess preparedness.

However, Mr Thompson acknowledged deficiencies in the US preparedness for
biological or chemical attacks.

With only 750 Federal Drug Administration inspectors to cover 55,000 food
preparation sites, the food supply chain was clearly vulnerable, he said.

But the greatest need was to co-ordinate public health services at federal,
state and local level. "Public health is a national security issue, and must be
treated as such," he said.

George Whiteside, a Harvard professor and 10-year veteran of the Defence Science
Board, which advises the Department of Defence, concurred with Mr Thompson, but
strove to dispel "scepticism" about the seriousness of biological threats.

According to government officials, Iraq, Iran, Syria, Sudan and Libya all have
active chemical or biological warfare programmes.

LOAD-DATE: October 3, 2001

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                        Financial Times (London,England)

                             October 1, 2001 Monday
                                London Edition 1

Sanctions aid the decline of Muslim states

BYLINE: By IRFA MIAN

SECTION: LETTERS TO THE EDITOR ; Pg. 26

LENGTH: 320 words


From Irfan Mian.

Sir, Martin Wolf makes the rudimentary error of confusing Islam the religion
with "Islamic countries" in "The economic failure of Islam" (September 26).

Readers will not be surprised to learn that material advancement is not the
central tenet of any world religion, and Islam is no exception.

One does not use a ruler with which to measure the volume occupied by a liquid.
Islamic supremacy from its inception up to the period of European colonisation
is undoubtedly a paradise lost for many Muslims, but notions of "democracy",
"sexual equality" and "law-governed states" do not contradict the teachings of
Islam.

Leaders in Islam are instructed to conduct their affairs on the basis of
Shura(consultation) and Ijma (consensus), while not only sexual but racial
equality are enshrined in the Koran. Individual and social responsibility and
duties are stressed in the Islamic legal system that is underpinned by the Koran
and Shariah.

The suggestion that Islam does not make it incumbent to establish a law-governed
state is a blistering error and gross mutation of the truth. The colonial
experiment predates the industrial revolution and not vice versa as the writer
suggests.

There are numerous reasons for the economic decline; not least the ignorance,
arrogance and political cunning with which the colonisers conducted their daily
business of resource extraction, while clipping the wings of free trade in their
Muslim colonies.

Muslim-governed India was only allowed to trade with her colonial master while
economic blockades of Mindanao in the southern Philippines turned it from the
most advanced to the most backward economic region in the Philippines.

I assume that Mr Wolf is equally vociferous in condemning sanctions on Iraq,
Iran, Libya, Afghanistan and Pakistan, because this is surely driving the
Islamic world further down the economic tubes.

Irfan Mian, 1 Jermyn Street, London SW1

LOAD-DATE: September 30, 2001

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                        Financial Times (London,England)

                          September 26, 2001 Wednesday
                                London Edition 1

Sudden move to centre stage gives Britain the chance to utilise its role:
Yesterday's events show the UK still has a part to play in the Middle East.
Brian Groom and Roula Khalaf report

BYLINE: By BRIAN GROOM and ROULA KHALAF

SECTION: ASSAULT ON AMERICA BRITAIN ; Pg. 8

LENGTH: 612 words


A diplomatic coup in Iran, a row with Israel. Rarely in recent years has Britain
appeared such a central player in the Middle East.

Although its influence has declined since before the second world war, when it
was the colonial power in Palestine and had wide interests in the region,
yesterday's events provided evidence that Britain still has the chance to make
use of its limited role.

The row with Ariel Sharon, while not insignificant, was predictable. Israel,
having accused Jack Straw of "sticking a knife in its back" by visiting one of
its most vehement enemies, was ready to be outraged. Its fury was vented over
the foreign secretary's article for an Iranian newspaper.

Parallels were drawn with Robin Cook's visit in 1998, when there was Israeli
outrage when he want to Har Homa, a Jewish settlement in east Jerusalem. But on
that occasion, Mr Cook was making a deliberate point to demonstrate displeasure
with expansion of Jewish settlements: yesterday's row was an unintended
consequence of attempting to repair relations with Iran.

"We've got to have our eye on the big picture here," said Menzies Campbell, the
Liberal Democrats' foreign affairs spokesman. "Jack Straw has won a very
considerable prize by getting the kind of response that he's got out of Iran
today."

By trying to win the support of a leading Islamic country for the international
coalition, Britain was seeking to deliver something that the US, which has had
no diplomatic representation since revolutionary guards occupied its Tehran
embassy in 1979, cannot. It was the result of a gradual thaw in UK-Iranian
relations since diplomatic links were restored in 1990.

Overall, Britain's role has declined, through the debacle of its Suez canal
invasion of 1956, its expulsion from Aden in the late 1960s, and its withdrawal
of forces from east of Suez in 1971. It has enjoyed good relations with Gulf
states, but the oil-fuelled contracts bonanza has come to an end.

Rosemary Hollis, head of the Middle East programme at the Royal Institute of
International Affairs, sees a further problem: British foreign policy has become
globalised, paying more attention to Washington, the World Trade Organisation,
the Group of Eight industrialised nations and the European Union than to local
circumstances.

Britain has, however, followed a more nuanced Middle East policy than the US,
demonstrating perhaps a greater understanding of the complexity of the problems.

It has balanced a hard line on Iraq with more accommodating policies on Libya
and Iran. The resolution of the Lockerbie crisis and the resumption of
diplomatic ties with Iran were seen by UK officials as part of a broader policy
that seeks to distance it from the US and to limit anti-British sentiment in the
Arab world.

Arab public opinion is critical of Britain for maintaining United Nations
sanctions on Iraq and contributing to the suffering of ordinary citizens. But,
to the UK's benefit, the perception is tempered by a suspicion that the UK is
simply following the US lead.

As Arab public opinion turned against sanctions in recent years, Britain moved
to underline that its policies were not inherently anti- Arab. It played the key
role in convincing the US to accept a compromise on the Lockerbie trial - it was
finally held in a third country - a move that paved the way for re-establishing
ties with Libya. And it has tried to engage in a resolution to the Sudan
conflict.

The European Union's constructive engagement with Iran, meanwhile, and the
distance the government of the Islamic Republic took from the religious edict on
Salman Rushdie, created an environment that allowed the thaw in relations with
Tehran.

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                        Financial Times (London,England)

                          September 26, 2001 Wednesday
                                London Edition 1

The economic failure of Islam: Muslim animosity towards the west has its roots
in an inability to respond effectively to centuries of financial progress

BYLINE: By MARTIN WOLF

SECTION: COMMENT & ANALYSIS ; Pg. 23

LENGTH: 1073 words


Why do they hate us so much? Along with the shock, anger and grief comes this
question. What makes men plan and execute an atrocity on the scale of September
11? To these questions, many offer two answers: their poverty and our policies.
Poverty fuels desperation; our policies stoke humiliation. Desperation and
humiliation breed terrorism. The answer is to end the poverty and change the
policies.

In its naive form, this view is implausible. The people who carried through this
attack are far from poor. Many originate in Saudi Arabia, a relatively wealthy
oil state. Equally, the west can do little to assuage such enemies, short of
disappearing from the region, if not from the world. Osama bin Laden and his
associates wish to expunge the "crusader presence" from Islamic holy places and
restore the golden age of Islamic supremacy. The aim is not peace with Israel,
but its annihilation. By confirming the Israeli presence, a peace agreement
could as well increase the risk of terrorist attacks on western targets as
reduce it.

The humiliation and rage that spawn what President George W. Bush called
terrorist groups "of a global reach" are real. But they are the result of a
long-term historic failure, not of recent events. We are eating the fruit of
three centuries of bitterness between a dominant west and an enfeebled Islamic
world.

Western power and wealth have transformed or destroyed traditional patterns of
life everywhere. Yet nowhere has the rise of the west - of which the US is the
contemporary avatar and Israel a humiliating symbol - posed a bigger challenge
than for the world of Islam, for two reasons.

First, for a thousand years the Islamic world thought itself more powerful, more
economically advanced and more intellectually sophisticated than the Christendom
with which it contended. Second, western ideas of democracy, liberalism, sexual
equality and a law-governed state conflict with Islam's traditional practice.

In assessing the response to the western challenge, Anatole Lieven, a senior
associate of the Carnegie Endowment for International Peace, judges that "with
the exception of some of the oil-endowed Gulf states and - to a limited degree -
Turkey and Malaysia, every single Muslim country has failed to enter the
developed world".*

The position is grim. Last year, according to the World Bank, the average income
in the advanced countries was Dollars 27,450 (Pounds 18,800) (at purchasing
power parity), with the US on Dollars 34,260. Israel's income per head was
Dollars 19,320. Against this, the average income of the historic belt of Islamic
countries that stretches from Morocco to Bangladesh was Dollars 3,700. If one
ignores the special case of the oil exporters, not one had incomes per head
above the world average of Dollars 7,350.

Turn then to economic policy. According to World Audit's index of economic
freedom, the highest ranks (out of 155 countries) in 2001 were 42nd, for Kuwait,
and 48th, for Morocco. Most of the countries were ranked among the most
restrictive in the world (that is, in the ranks above 100). Again, in the
well-known Freedom House evaluation of political liberty, just five of these
countries (Bangladesh, Jordan, Kuwait, Morocco and Turkey) were judged even
partly free. The rest were simply "not free". World Audit places six of these
regimes (Afghanistan, Iraq, Libya, Saudi Arabia, Somalia and Sudan) among the
eight most politically repressive in the world.**

Western ideas of political organisation and economic policy have been resisted
or rejected. The countries of the Islamic belt are not just poor, but are
falling behind other developing countries. In 1950, Egypt and South Korea had
much the same standard of living. Today, South Korea's is almost five times as
high. Remarkably, India's standard of living is now almost half as high again as
Pakistan's.

The failure of the core countries of the Islamic world to match the industrial
revolution is not surprising. Apart from the political, social and ideological
differences from the west, they lacked fast-running water, coal and iron. Then
western imperialism entered the region, depriving it of the capacity for an
autonomous response. The last half century has been a different matter. If one
puts to one side the special case of Turkey, the principal attempts at
modernisation were made by socialist regimes, all of which have failed. Now the
region lives with the consequences of that failure in a resurgent fundamentalism
and the often repressive reaction of western-supported regimes.

In the words of Bernard Lewis, historian of the Islamic world, "Ultimately, the
struggle of the fundamentalists is against two enemies, secularism and
modernism. The war against secularism is conscious and explicit . . . The war
against modernity is for the most part neither conscious nor explicit, and is
directed against the whole process of change that has taken place in the Islamic
world in the past century or more."***

The desire for return to a pure form of religion is not new. But the call to a
purified faith has wider appeal today than before. Everywhere in the developing
world, people must respond to the intrusive impact of the ideas and the
prosperity of the western world, in general, and of the US, in particular. But
religion makes a difference to the nature of that response. A universal religion
with all-embracing political and social claims offers a lens on the world
different from that available to a Chinese or a Hindu. Most fundamentalists are
in no way terrorists, far from it. But they can offer a reason to die - or to
kill.

Western policymakers face harsh realities. They can try to make their countries
safer. They can act directly against the terrorist threat. They should try to
cajole Israel into a peace acceptable to the Palestinians, though that would not
end terrorism by those who believe the Jewish state should disappear. They can
also encourage political and economic liberalisation among their clients. But
the west cannot make the region rich or politically stable. It cannot secure an
accommodation between the traditions of Islam and the demands of the modern
world. All it can do is the best it can with the world that there is - and
endure.

* Strategy for Terror, Prospect, October 2001, www.prospect-magazine. co.uk **
www.worldaudit.org *** The Roots of Muslim Rage, The Atlantic, 1990,
www.theatlantic.com/issues/ 90sep/rage2 martin.wolf@ft.com

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                        Financial Times (London,England)

                          September 26, 2001 Wednesday
                                London Edition 1

Huge fall recorded by EMI

BYLINE: By PETER JOHN and RUTH SULLIVAN

SECTION: STOCK MARKETS LONDON STOCK EXCHANGE ; Pg. 50

LENGTH: 992 words


EMI plunged to its lowest level since 1988 yesterday after a shock profits
warning.

The company said that since July, when it highlighted "difficult and
unpredictable music market conditions", there had been "a marked deterioration
in these conditions".

It added that "our own trading in recorded music, particularly in the USA and
Latin America, had been weaker than anticipated".

In an attempt to point out how undervalued the company was, it also told some
analysts that its music publishing assets were worth more than the company's
market capitalisation.

The shares fell 116 to 214p, easily the biggest decline among the UK's 350
largest quoted companies, on turnover of 30m as investors fretted about the
security of the dividend.

There was additional pressure from overseas. AOL Time Warner came under pressure
late on Monday after the media giant warned that its full-year cash earnings
would be below its earlier estimates as the advertising market worsened
following the US terrorist attacks. Oil stocks BP and Shell Transport slipped as
the oil price continued its downward spiral despite a statement by Libya's oil
minister that OPEC would cut production if the oil price stayed below Dollars 22
a barrel.

Fears about the impact of the terrorist attacks on the US and the risk of a
recession as a result combined with concern about last night's US inventory
data. The market expected a build of 1m barrels after July's inventories slipped
to their lowest level since March.

There was also broker caution. CSFB upgraded BP to "buy" from "hold" but cut its
long-term growth assumption for the sector to 3 per cent a year from 4 per cent.
Deutsche Bank reiterated its "neutral" stance on the sector, saying it was too
soon to move to an overweight position. BP fell 3 to 509 1/2p. Shell was off 223
at worst but rallied to end a net 1 1/2 higher at 466 1/2p.

The continued trickle of share buy-backs reflected a perception by some
companies that the market was starting to bottom out.

Barclays buys back

Barclays which started its share buy-back programme on Friday, bought on another
300,000 at Pounds 16.16 yesterday. The shares lifted 120 to Pounds 17.40 with
support from Merrill Lynch.

Canary Wharf bought back 300,000 shares at 452p a share, Marks & Spencer 750,000
at 237p and Diageo 1m at 671p - all through Cazenove.

Celltech jumped 54 1/2 to 628p as JP Morgan joined the brokers turning more
positive on the biopharmaceutical group by upgrading it to "buy" from "hold"
with a fair value target of 909p. It said the shares had fallen 45 per cent in
10 weeks.

This meant the shares would be at fair value if sales from the group's
rheumatoid arthritis drug, were only Pounds 500m by 2008, and revenues were
ignored from the group's attention deficit drug, its restenosis treatment and
its asthma antibody. The arthritis treatment, soon to enter Phase III trials, is
estimated to have peak sales more than Pounds 1bn.

Daily Mail & General Trust rebounded 55 to 558p as a reassuring trading
statement gave the shares a chance to recoup previous heavy losses triggered by
recent events in the US. Analysts, however, cautioned that the gains may be
short-lived given the thin volume and several earnings downgrades.

BSkyB added 17 at 617p as it was announced that Deutsche Bank was warehousing
the Vivendi stake which has been overhanging the stock.

Scottish Power gained 25 to 403p as Goldman Sachs raised its stance on the group
to "market outperformer" from "market performer" and reiterated its 500p price
target. It said the utility was oversold against its low-case valuation of 415p
after the 25 per cent absolute fall in its shares since its recent profit
warning.

International Power gained 11 3/4 to 217p after Lehman Brothers upgraded it to
"buy" from "market perform".

Fraser forward

Department store House of Fraser gained 4 to 82 1/2p after the retailer reported
that first-half losses had narrowed and it had already made a strong start to
the second half. First half losses reduced from Pounds 6.6m to Pounds 1.5m, a
better performance than analysts' expectations.

The company said it did not need to reduce its forecasts after the US terrorist
attack and was confident of a strong outcome for the full year. The group said
like-for-like sales were 4.7 per cent higher in the eight weeks up to 23
September. House of Fraser is not so exposed to foreign tourists as other
department stores and has held up better than Debenhams and Selfridges.

"We need to see returns from the investment in the new stores now", said David
Stoddart of Teather & Greenwood. The broker kept its recommendation of "hold".
The shares closed with a gain of 1 1/2 to 80p. Selfridges lost 5 to 268p, while
Debenhams held at 353p.

The leisure sector brightened with cruise company P&O Princess bouncing back 30
to 210p after a reassuring trading statement. Anticipating reduced demand from
North American passengers for cruises in the Indian Ocean, Middle East and
Africa, the company took the step of redeploying its ships. Shares are beginning
to regain some of the ground lost after the terrorist attack in the US. Before
the disaster they were trading at 360p.

Tour operator Airtours also staged a strong rally, climbing 26 to 156p after an
upgrade from "underperform" to "neutral" by WestLB Panmure. Analysts said that
they believed Airtours has acted rationally and already implemented plans to cut
summer capacity for 2002 significantly. The leisure team at Deutsche Bank
reiterated its "buy" recommendation.

Shares in no-frills airline easyJet also gained 49 to 297 1/2p after Monday
evening's trading statement and bookings were said to be back to normal. Brokers
were said to be upgrading recommendations.

Low-cost airline Ryanair gained 34 1/2 to 508p after it said that its bookings
had been largely unaffected by the US terrorist attacks and sees no reason to
alter its forecasts. Regular UK equities updates at www.ft.com/equities

LOAD-DATE: September 25, 2001

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                        Financial Times (London,England)

                          September 26, 2001 Wednesday
                                London Edition 1

Sliding price of crude may trump Venezuelan president's oil ace: Chavez's
flirtation with countries deemed rogue states by the US is returning to haunt
him, writes Andy Webb-Vidal:

BYLINE: By ANDY WEBB-VIDAL

SECTION: EUROPE & THE AMERICAS ; Pg. 13

LENGTH: 677 words


As US foreign policy polarises into the classification of governments as allies
or enemies in President George W. Bush's declared "war on terrorism", scrutiny
in Latin America is falling on Venezuela's President Hugo Chavez.

Like all other Latin American presidents, Mr Chavez has unequivocally condemned
the hijack attacks on the US and pledged his government's commitment to fighting
terrorism.

But his past flirtation with leaders of countries deemed "rogue states" by the
US, his ties with Arab oil nations uneasy about the US military build-up, plus a
string of events that have strained relations with Washington are returning to
haunt him.

"This may strengthen the position of those in the State Department who see
Chavez as a problem," said Michael Shifter, analyst with the Inter-American
Dialogue. "But he can hold the hardliners at bay by keeping oil flowing. He
still has the ace."

Washington was angered last year when the Venezuelan leader visited Iraq's
Saddam Hussein as part of a tour to invite heads of state of the Organisation of
Petroleum Exporting Countries to a summit in Caracas.

Jose Rangel, the foreign minister at the time, rebuffed criticism from the State
Department, insisting that, "be it on a skateboard or on a camel", Mr Chavez was
going to Baghdad.

In August, the US was again irked when Mr Rangel, now defence minister, asked
the permanent US military mission in Venezuela to vacate its offices in the
military headquarters in Caracas, saying its presence was an anachronism from
the cold war.

The tone for Mr Chavez's uneasy relationship with the US was set shortly after
he took office two years ago when he released an open letter expressing
solidarity with, but not condoning the actions of, Ilich Ramirez Sanchez, the
convicted terrorist better known as Carlos the Jackal, who is now serving a life
sentence in France for three murders.

Domestic critics have also been concerned about Mr Chavez's "neutral" stance
towards Colombia's two main rebel groups, both on the State Department's
terrorist blacklist.

Latin American diplomats say the US has avoided an open confrontation with Mr
Chavez in part because of Venezuela's importance as a major oil supplier to the
US. However, the tolerance displayed by Washington is likely to diminish, they
say.

Since the attacks, Mr Chavez has made clear that, while he will guarantee
Venezuelan oil supplies to the US, he "could not sign a blank cheque" to endorse
a military campaign that bypassed the United Nations, echoing the view of
several other countries.

Diplomats are now watching for confirmation of whether the Venezuelan leader
will proceed with a scheduled visit in October to Libya's Colonel Muammer
Gadaffi.

"Venezuela is significant to the US in terms of energy security, in that sense
Chavez has indicated what side he's on," said Adolfo Salgueiro, an international
relations analyst.

"But if he goes to Libya, even though he has every right to, whether the
Americans like it or not, it would send a very negative signal at a time like
this."

Analysts warn the hardening of US foreign policy could force Mr Chavez to steer
a narrower channel between behaving in the eyes of Washington and preserving
good relations with fellow Opec members, such as Iran, which is warning against
an over-zealous US military campaign.

Clues to the shifting alliances among Opec members could emerge today, when oil
ministers meet to ponder the deteriorating prospects for crude oil demand and to
review output quotas.

Key to the outcome will be the role of Ali Rodriguez, Opec's secretary-general,
who will try to prevent heightened political tensions between members from
allowing them to agree on how Opec deals with a looming global recession.

Mr Chavez, analysts say, now needs the diplomatic skills of Mr Rodriguez, his
former energy minister, more than ever before.

But if oil supplies from Arab countries escape disruption by the impending
US-led military campaign, and crude prices continue to slide, oil may no longer
be the ace in the hands of the Venezuelan leader.

LOAD-DATE: September 25, 2001

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                        Financial Times (London,England)

                           September 21, 2001 Friday
                                London Edition 2

Europe's dealings with US foes may bear fruit FOREIGN RELATIONS:

BYLINE: By JAMES BLITZ and VICTOR MALLET

SECTION: ASSAULT ON AMERICA EUROPE RESPONDS ; Pg. 4

LENGTH: 446 words

DATELINE: PARIS and ROME


Europe's willingness to court America's enemies around the world has long been a
source of irritation in Washington.

Italy has befriended Libya, Germany has cautiously embraced Iran and France has
gone as far as it can towards establishing a relationship with Iraq without
breaking UN sanctions.

France has even welcomed senior members of the internationally unrecognised
Taliban regime of Afghanistan on three occasions at the foreign ministry in
Paris, although it insists the visits were of a purely humanitarian nature.

These links between European governments and countries shunned by the US as past
or present supporters of terrorism will come under intense scrutiny as President
George W. Bush builds an international coalition to avenge last week's attacks
in New York and Washington.

But Europe is unlikely to abandon its new friends simply to show solidarity with
the US in the aftermath of the attacks.

Instead, it is Washington that will probably reassess some of its relationships
in Asia and the Middle East. The US has already softened its stance towards
Pakistan - the gateway to Afghanistan - and realises that it shares with Iran,
another neighbour of Afghanistan, a potentially fruitful hostility towards the
Taliban.

"It's absolutely fascinating to see the speed with which the political map is
being redefined," says Francois Heisbourg, who heads the Foundation for
Strategic Research in Paris.

Europe's current interest in oil-producing countries such as Iran and Libya is
largely commercial. European companies - including Nokia of Finland and France's
TotalFinaElf - are more than happy to take advantage of America's refusal to
deal with Tehran or Tripoli.

The Iran-Libya Sanctions Act, recently renewed, allows the US president to
punish foreign companies that invest large sums in oil or gas development, but
it has not deterred some European investors.

Eni, the Italian energy group, is the latest company to risk falling foul of the
law, and it was notable that Vittorio Mincato, Eni's chief executive, leapt to
the defence of the Libyans shortly after the terror attacks in the US.

In the end, some of Washington's worst enemies may - with the help of their
European friends - turn out to be part of the solution if they can convince
everyone they are no longer involved in terrorism themselves.

"The Libyans are not friends of the Islamists," says Mr Heisbourg. "Gadaffi can
be called all sorts of bad things but a religious fundamentalist he is not.

"The same is true of Syria. And it can't hurt that the French and the Germans
have maintained normal political and economic relations with Iran." Additional
reporting by James Blitz in Rome

LOAD-DATE: September 20, 2001

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                        Financial Times (London,England)

                          September 20, 2001 Thursday
                                London Edition 4

US police alert to Muslim victims of fear and loathing: Arab communities suffer
backlash in spite of official support, writes Nancy Dunne:

BYLINE: By NANCY DUNNE

SECTION: BACK PAGE - FIRST SECTION ; Pg. 20

LENGTH: 774 words


Muslim and Arab communities in the US, still grieving over the events of terror
last week, are also dealing with hundreds of assaults, bomb threats and
harassment.

Many Muslim women are frightened to leave their homes with their heads covered
and children are scared to go to school.

But the communities have been heartened by what they see as unstinting support
from the Bush administration, Congress and the media. They were particularly
encouraged by President George W. Bush's visit on Monday to the Islamic Center
of Washington, where he denounced those seeking reprisals as "representatives of
the worst of humankind".

The police have been swift to launch investigations into attacks on Muslims in
the past week and the Department of Justice is preparing prosecutions for hate
crimes within the next two weeks, according to James Zogby, chairman of the Arab
American Institute in Washington.

But the authorities are under unprecedented pressure to clamp down on terrorist
activity, and Arab and Muslim Americans fear that there are already signs of
over-zealousness and erosion of their civil liberties.

Stanley Cohen, a Jewish civil rights lawyer, who defends many Muslims, said the
Federal Bureau of Investigation had intimidated worshippers at mosques and
entered their homes "at all hours of the day and night".

"When they are less than co-operative, they have called in (the immigration
service) to investigate them," he said. "We have seen an unprecedented increase
in profiling." He noted that the FBI and local police have been picking out cars
driven by Arabs, stopping them as they come in and out of Washington and
questioning the drivers.

He claims that illegal seizures of property by the police have rocketed and a
large number of "material witnesses" have been jailed.

John Ashcroft, the attorney general, has vowed to protect the civil rights of
"everyone". Officials from the state and justice departments have been regularly
meeting Arab and Muslim representatives to hear their concerns.

The Civil Rights Commission and the Equal Employment Opportunity Commission have
dispatched directives to their local offices to make efforts against
discrimination against Arabs and Muslims.

The administration is committed to "smoking out" the terrorists. The Justice
Department has announced rules governing detention that would allow immigrants
to be held indefinitely during a national emergency, instead of the current
48-hour duration. A broad package of anti-terrorism legislation will be sent to
Congress to give the Justice Department powers to arrest immigrants.

"It's starting," said Ibrahim Hooper of the Council on American Islamic
Relations. "The environment of hysteria will lead to the curtailment of civil
liberties."

His group has received notice of more than 400 instances of harassment and
assaults against Muslims.

Incidents of over-reaching police tactics could hinder the efforts to include
Muslims and Arab governments in an anti-terrorism coalition. The FBI raided and
"tore up" the apartment of the son of a prominent Saudi, Mr Zogby said, before
returning, twice, to conduct further questioning.

Local police agencies have also allegedly been "over-zealous". Driving home late
at night recently, Mr Zogby recognised an elderly Pakistani with a white beard
backed against a wall by five or six police cars.

The FBI declined to comment last night on claims about over-zealousness by the
law enforcement agencies.

Because of the nature of the challenge and the response that is planned (against
terrorism)," the US cannot afford to allow such incidents, said Clovis Maksoud,
former Arab League ambassador to the UN and the US. It was important not to
reinforce "elements in the Muslim world" already opposed to US policies.

The administration's sensitivity to Muslim and Arab concerns comes after years
of organising with many groups lobbying in Washington. The Council on American
Islamic Relations was founded in 1992 by two people to counter stereotyping of
Muslims by the American media and pop culture. It now has branches around the
country.

Most Muslim commentators have praised the sensitivity of US television anchors -
particularly Ted Koppel, who frequently urged viewers not to confuse Muslims and
Arabs with the terrorists.

But, said Afshin Molavi, a writer on Iran, some pundits have used incendiary
language. Bill O'Reilly, a talk show host on cable TV, urged the bombing of
Afghanistan, Libya and Iraq, saying: "If they don't like it, they can eat sand."

Most Muslim and Arab American leaders say they want what they seem least likely
to get: a serious discussion of the roots of terrorism.

LOAD-DATE: September 19, 2001

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                        Financial Times (London,England)

                          September 20, 2001 Thursday
                                London Edition 1

The voice of Europe

SECTION: LEADER ; Pg. 18

LENGTH: 441 words


Europe has displayed an impressive discipline in its response to the terrorist
assault against the US. After an outpouring of sympathy came a powerful
expression of collective resolve when Nato invoked article 5 stating that an
attack on one member was an attack against the alliance.

Now comes the hard part. The intense diplomacy across the Atlantic this week
underlines concern in European capitals about how the Bush administration
intends to manage the next phase of the crisis. A military response is
inevitable. But the timing, the targets - and above all the objectives - in the
new war on terrorism remain unclear.

Tony Blair, who follows Jacques Chirac to Washington, will naturally want to
influence the administration's deliberations. Britain, France and the rest of
the European Union want to know what the international coalition against
terrorism is ultimately for. Is it a broad alliance with the narrow objective of
punishing the perpetrators, or does President George W. Bush favour a narrow
US-led coalition with the broad objective of a war against terrorism around the
globe?

Mr Bush's Wyatt Earp rhetoric gives the impression of a trigger-happy president.
But his pledge to bring Osama bin Laden, the fugitive Saudi terrorist, to
justice "dead or alive" is more geared to an American audience bent on revenge.
In practice, the White House seems more circumspect. As Mr Bush told
Congressional leaders: there is not much point in dispatching Dollars 2m
missiles to destroy an empty Dollars 10 tent.

Europe's leaders should reinforce the case for proceeding carefully - but not to
the point of ruling out any action that could risk civilian casualties. The
issue should not be whether the retaliation should be proportionate, but whether
it is precise if it comes to commando strikes against Mr bin Laden's camps in
Afghanistan.

This will be the first phase of the war on terrorism. The second will be a wider
onslaught on the regimes which support terrorism as well as their financial
networks. This will have far-reaching repercussions since it could include
countries such as Libya, Iran and Iraq. Europe will want to have a say in this
second phase; but EU leaders must realise that their influence will depend on
their commitment to the first military phase of the war.

The international coalition will come under increasing strain in coming weeks.
But if European countries break rank, they cannot expect a fair hearing in
Washington. Equally Mr Bush should take note of the efforts which EU governments
are taking this week to strengthen counter-terrorism. For this is the arena
where ultimately the war can be won.

LOAD-DATE: September 19, 2001

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                        Financial Times (London,England)

                           September 18, 2001 Tuesday
                                London Edition 1

The question for all: to fly or not to fly?: BUSINESS TRAVEL: After last week's
attacks on New York and Washington, travellers face a mix of fear and
frustration. Some may decide to stay at home, says Amon Cohen:

BYLINE: By AMON COHEN

SECTION: INSIDE TRACK ; Pg. 16

LENGTH: 1516 words


At the time of the Gulf war in 1991 vast numbers of travellers abandoned flying.
Forthe first time since the start of the jet age air traffic volumes fell in
absolute terms.

As the shock of last Tuesday's hijacks sinks in and the White House plans its
response, the Gulf war offers the best guide to what changes are in store for
airlines and travellers. But there is an important difference. The war between
Iraq and the US-led coalition posed theoretical risks for air travellers; the
terrorists who attacked the World Trade Center and the Pentagon used passenger
aircraft as weapons of mass destruction.

Some indications of the long-term effects of such destructive hijacks in US air
space and the declarations of military intent from the White House are already
apparent in the form of shrunken schedules, massively increased and
time-consuming security measures and looming financial hardship, if not outright
bankruptcy, for even the largest airlines.

Impending military retaliation by US forces and their allies has led Control
Risks Group, the overseas security consultancy, to urge the cancellation of
travel to Afghanistan, Pakistan and Yemen. Control Risks also recommends
postponement of non-essential travel to Algeria, Egypt, Iran, Iraq, Israel and
Gaza/West Bank, Jordan, Kuwait, Lebanon, Libya, Saudi Arabia, Sudan, Syria,
Tajikistan and Uzbekistan because of possible hostility from the local
population. Westerners should stay in touch with their embassies and consider
moving out of the vicinity of offices or homes near high-profile US targets.

Christopher Grose, Control Risks' director, warns travellers in these countries
to maintain a low profile. "Don't have luggage labels that identify your
nationality," he says. "Don't travel unnecessarily within the country either -
go in, do your business and leave. While you are there, keep away from known
meeting places for expats such as cafes and restaurants."

The company also lists a third category of 24 countries (see www.crg.com) in the
Middle East, Africa and Asia where there is no need to avoid travel but where
companies should heed advice from diplomats.

There are other ways to minimise risk. Whatever the destination, the National
Business Travel Association is warning travellers to increase levels of
preparation. Its tips include sharing details of itineraries with colleagues and
family, carrying two forms of identification - one on the traveller's person and
one in the luggage - carrying full travel documentation and medical information
and making sure mobile phones are fully charged.

The assumption behind this advice, of course, is that employees will not cease
travelling completely. However, the Business Travel Coalition, an advocacy group
for leading US purchasers of corporate travel, believes US companies will stop
flying internationally during any military campaign. "A lot of executives have
said they are not going to be caught outside the US as they were in the Gulf
war," says Kevin Mitchell, BTC's chairman. "The other message companies are
giving employees is that there is no pressure on them to travel if they feel
uncomfortable doing so."

Those who do travel will have to accept that checking in will become slower than
ever as baggage and body searches are stepped up. Recent time-saving innovations
such as check-in desks away from airports at hotels and other locations will be
scrapped.

Travel professionals are anxious that governments achieve a reasonable balance
between security and convenience, especially given that the September 11
hijackers did not carry anything illegal on board. "If you trebled the security
that we had last week, it would not solve the problem," says Mr Mitchell. "What
went wrong was a big gap in intelligence-gathering."

The importance of intelligence means that the security practices of El-Al, the
Israeli airline, may become the blueprint for other airlines. It is not just
rigorous searches that have kept Israel's flag-carrier free from hijacks since
1968; it is also the intensive, informed interrogation of all passengers,
minutely checking their identity, purpose of travel and documentation for any
suspicious signs. El-Al is not afraid to delay departure of an aircraft if it
has misgivings about an individual and wishes to question them further.

The check-in for El-Al flights is 150 minutes for economy class and 90 minutes
for business class, about 60 and 30 minutes longer respectively than normal for
travel to the Middle East.

Not every new security measure need slow down travel. There is now new impetus
for the introduction of hand- and retina-scanning techniques that airports and
immigration authorities have experimented with for years. Those who have
participated in these schemes, such as INSPass at several international US
airports, find them fast and reliable. The political faint-heartedness that has
hindered their introduction may now be overcome.

Despite such innovations, Kevin Iwamoto, the NBTA president, is among those who
believe travel will become far more time-consuming and less attractive.
"Business travel as we know it today is going to be transformed," he says.
"Companies have already been thinking about the value of travelling because of
economic conditions. Now they are really going to look at who should travel and
why. Companies will have to decide which types of travel are business-critical
for them." They are also likely to impose stricter limitations on the number of
employees who can travel on the same flight.

All this will promote alternatives to commercial air travel. Mr Mitchell
believes there will be a sizeable shift to the car for domestic US journeys
under 500 miles. There are even suggestions that the US may develop a good
high-speed rail network.

For international trips and others that must be made by air, companies may use
the savings from reduced travel volumes to spend more on trips that really
matter. In particular, full or part ownership of aircraft and business charters,
already on the increase in recent years, could become more popular still. The
time savings they offer in terms of reduced check-in times and access to
alternative airports will become even more pronounced.

Where people do not need or want to travel, video-conferencing is likely to
become more widely used. David Radcliffe, chief executive of worldwide travel
management company Business Travel International, says experience has shown that
it can replace certain types of travel, such as for internal meetings. However,
users quickly discover the limitations of video-conferencing as a means of
communication. "Business travel will continue to play an important part in the
cycle of doing business," says Mr Radcliffe. "You cannot shift the need for
people to meet other people."

How much the journeys that will have to be made will cost remains a matter of
conjecture. Some commentators have predicted that air fares will drop; others
that they will shoot up. In fact, the initial effect is likely to be a fall.
Fares were already softening as a result of falling demand. In last week's
outrages, United Airlines lost a Boeing 757 with 38 people on board and a 767
with 56 people. Capacity on both aircraft types is usually about 250. Now demand
will fall even more sharply. "Fares will fall in the short term because there is
too much capacity," says Mr Mitchell.

Ultimately, though, fares are likely to rise. "The costs of not being able to
carry cargo (on passenger flights), new security measures and increased
personnel costs will all be borne by customers," says Mr Mitchell. Business
travellers will be hit hard, he predicts, especially on monopoly routes.

Other inflationary pressures on price will include higher insurance premiums for
airlines and raised oil prices if there is conflict in the Middle East. Airlines
will also use their aircraft less efficiently because turnaround times at
airports will be slower. On top of this will come a contraction in supply. Most
US carriers have announced a 20 per cent reduction in schedules over the past
few days. Furthermore, competition is likely to diminish. "It is very likely
that some carriers will fail," says Ed Smick, an airline restructuring
specialist with SH&E, the aviation consultancy.

However, Mr Smick thinks eventual fare increases will not be exorbitant.
Security costs, he points out, will remain a small proportion of overall airline
costs even when they go up. More important, he observes, is the fact that
"elasticity of demand is something every airline must consider. They already
know that consumers do not accept heavy increases in fares."

Nor does the corporate world in general. Without an affordable, convenient air
transport system, international business will not flourish. A balance will have
to be found in the months ahead as authorities consider draconian security
measures and financial intervention to save their airlines. "Society needs a
mass air transport system," says Denis Chagnon, spokesman for the International
Civil Aviation Organisation. "What is it willing to pay for it in time and
money?"

LOAD-DATE: September 17, 2001

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                        Financial Times (London,England)

                           September 17, 2001 Monday
                                London Edition 1

Enemies within and without: Stella Rimington's memoirs are a timely reminder of
the liberties sacrificed in the fight against terrorism, writes Jimmy Burns.

BYLINE: By JIMMY BURNS

SECTION: COMMENT & ANALYSIS ; Pg. 25

LENGTH: 830 words


As the west digests the horror of last week's attack on America, some old
questions about the effectiveness of state intelligence agencies and the
reasonable limits of counter-terrorism in democratic societies have come to the
fore again. Against that background, Stella Rimington's memoirs of a 30-year
career with MI5, Britain's security service, is unexpectedly timely and deserves
careful attention.

The former director-general's career spanned a period during which security
agencies on both sides of the Atlantic were forced to adapt their modus operandi
to cope with huge political change.

The cold war, dividing the world as it did along clear ideological lines, made
the task of the intelligence community relatively straightforward. Spies on both
sides of the Atlantic operated in a world of their own, removed from public
scrutiny.

It was not, as Rimington protests, just spooks playing games: there were real
interests to protect, and the activities of traitors such as Kim Philby, and
more recently, Aldrich Ames, cost lives as well as information. But espionage
was performed by professionals; it was a battle fought was between two
superpowers with a mutual interest in avoiding a real war.

At home, however, MI5 trod a more ambiguous path, seeking out and disrupting
alleged "subversives" with the blessing of elected governments. In her time in
counter-subversion, Rimington's department prepared files to vet individuals'
access to the public sector, and monitored organisations including Campaign for
Nuclear Disarmament, the National Union of Mineworkers and the Labour Party.

Parliament defined subversion as actions "intended to overthrow or undermine
parliamentary democracy by political, industrial or violent means". Arguably the
activities of Ms Rimington and her colleagues, just like those of Edgar Hoover,
were disproportionate, although she insists she always drew a distinction
between "subversion" and political dissent.

During the 1970s and 1980s, when US intelligence remained focused on the
communist world, MI5 was forced to reorganise itself in the face of the threat
from the IRA and the almost simultaneous development of "international
terrorism". As Rimington puts it: "Suddenly the tried and tested techniques used
to catch spies and monitor Soviet intelligence officers . . . did not quite fit
the bill of dealing with people who were aiming to kill."

Resources were switched into understanding the aims and methods of the terrorist
groups so as to counter them, and to react quickly to events as they unfolded.
To increase the chances of success, a way had to be found to distribute and to
share highly sensitive intelligence across borders.

The new spies, however, faced formidable difficulties, many beyond their
control. Different law enforcement cultures and varying perceptions of national
self-interest conspired against effective collaboration, not least in the former
Soviet Union.

Rimington names those countries that "actively used terrorism as an arm of
foreign policy" as Libya, Syria, Iran and Iraq. She says nothing about the fact
that, while western security agents pursued terrorists, their governments signed
trade deals with these countries.

Revelations by whistleblowers of dirty tricks and parliamentary oversight have
forced the security agencies to be more accountable for their actions in recent
years. Rimington, a bit of a self-promoter but certainly no whistleblower
herself, believes that Britain provides a good model for those who argue that
the security services and the police must have the powers to deal with the
terrorists of the 21st century in a way that preserves rather than destroys
civil liberties.

Post-Watergate and post-Irangate, the CIA has been subjected to heavy
congressional criticism. But MI5 has been covered by case law under the European
convention which recognises that a state may set up a security service to
provide a covert response to covertly organised threats. This has allowed it to
to break into property and plant microphones, under the provisions of the
Security Act, subject to legal redress.

Rimington is on occasion slightly dismissive of the Americans' "vast teams of
communicators and enormous satellite dishes". She also highlights Washington's
equivocal attitude in the past towards militant Irish republicanism.

Encouragingly, her experience of dealing with the IRA suggests that improved
internal and cross-border security co-operation and back-to-basics human
intelligence can help neutralise terrorists. Ultimately, however, improved
intelligence can be only part of the solution. Under Rimington's leadership, MI5
failed to predict several IRA bomb attacks including those on the City of
London, Manchester, and London's Docklands. Those attacks had as much to do with
the lack of political progress in Northern Ireland as with the inefficiency of
the security forces. As Rimington herself puts it: "Terrorism is of course an
immensely political business."

LOAD-DATE: September 16, 2001

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                        Financial Times (London,England)

                           September 14, 2001 Friday
                                London Edition 1

America's war: This week's attack on the US was launched from within, and George
W. Bush's fight against terrorism will be prosecuted at home as well as abroad,
says Lionel Barber:

BYLINE: By LIONEL BARBER

SECTION: COMMENT & ANALYSIS ; Pg. 22

LENGTH: 1303 words


America fought a War on Poverty in the 1960s and a war on drugs in the 1980s.
Now, in the wake of this week's devastating assault on the Pentagon and the
World Trade Center, President George W. Bush has declared war on terrorism.

The implications of this step change in foreign policy are enormous, not only
for a traumatised America but also for the US allies that have rallied around
the stricken superpower. As Mr Bush said in his televised address to the nation
on Tuesday night: "The US will make no distinction between those who committed
these acts and those who harbour them."

In effect, the US has pledged to mobilise its formidable resources - economic,
political, military and technological - to waging a war without mercy against
terrorist groups, their patrons, even their sympathisers. At face value, this
suggests a sustained commitment against a declared enemy on a scale not seen
since the start of the cold war, when President Harry S. Truman declared in
early 1946 that he was tired of "babying the Soviets", that they understood only
"an iron fist and strong language".

Some will dismiss Mr Bush's words as the rage of the impotent. Others will argue
that wars against implacable enemies willing to give up their lives for
martyrdom are inherently unwinnable. The administration sees things differently.
"Fighting terrorism has always been important for the US," says Reginald
Bartholomew, a former top State Department diplomat who was ambassador in
Lebanon in 1983 when terrorists blew up a US barracks, killing 242 marines. "But
now it will become the number one priority. It will become the touchstone for
the alliance."

The world's initial response has been an impressive show of solidarity.
Spontaneous demonstrations took place in the streets of Berlin. Unequivocal
condemnation of the terrorist attacks echoed across Paris. Wreaths were laid in
Moscow. The most valuable expression of collective resolve came late on
Wednesday evening in Brussels, when Nato ambassadors invoked for the first time
Article 5 of the alliance's charter. The clause states that an attack against
one member is an attack on the alliance.

Not even during the height of the Cuba missile crisis, when the US and Soviet
Union came to the brink of nuclear war, was Article 5 invoked. The Brussels
resolution, therefore, appears to commit Nato fully to Mr Bush's new war.

In reality, allied support is more nuanced. Several Nato members, including
Britain, have insisted that there is no "blank cheque" for US military action.
Others, notably Turkey, worry about guaranteeing US access to their airspace and
bases lest they become vulnerable to reprisals. In Germany, Otto Schily,
interior minister, noted pointedly that there was no current terrorist threat to
the country. But this could change, depending on the type of military action the
US chose to pursue.

However genuine this week's expressions of condolence, there were already doubts
in Europe about the thrust of the Bush administration's foreign policy before
the attack. The optimistic view is that a new common war against terrorism could
bridge divisions. The alternative is that it could increase tensions.

One long-standing European concern has been the US plan to deploy national
missile defence, which many fear could provoke a crisis with the Russians or the
Chinese. A separate worry in Europe is what is seen as the administration's
combination of high-handed unilateralism and virtual disengagement in the
Balkans and the Middle East.

A senior European official complains that the administration's desire to
distance itself from its predecessor has led to an "anything but Clinton"
policy. Willy-nilly, this has allowed a vacuum to develop in which Prime
Minister Ariel Sharon has felt able to pursue a relentlessly hard-line approach
toward the Palestinian conflict and the Palestine Liberation Organisation. "It's
simply no good just blaming (Yassir) Arafat," he says.

Suggestions that a more even-handed US policy toward the Arab-Israeli conflict
could have prevented this week's terrorist outrages are enough to make US
officials incandescent with rage. In their view, the causes of terrorism go far
beyond the Arab-Israeli conflict. They extend to a fundamental cultural divide
between those who view the US as the Great Satan and those who support America
as exponent of the values of the modern world.

So what are the options for the administration? In the first instance, says one
official, the US will be far more open to sending in ground forces to capture or
kill terrorists or to punish regimes that aid or abet them. This would mark a
shift in the Pentagon's policy of using precision bombing as its weapon of
choice. It would overturn a US reluctance to commit ground forces that has
existed since the 1993 debacle in Somalia, in which US rangers were killed and
dragged through the streets.

Second, the administration is likely to take an even tougher line with countries
suspected of sponsoring terrorism or "accomplice" states. The last State
Department report on state- sponsored terrorism included six countries: Iran,
Iraq, Syria, Libya, North Korea and Sudan. In each case, says one official, the
US will use every available means to detect whether there are direct links
between the regime and terrorist groups and will hold open the threat of
punishment.

The third and final category concerns "fellow travellers" - countries such as
Aghanistan or Pakistan with governments that may not actively support the
terrorist groups within their borders but are unwilling or unable to do anything
about it.

Much attention has focused on Osama bin Laden, the renegade Saudi terrorist
believed to be in Afghanistan. Mr bin Laden, who was reported to be under house
arrest, has been tied to several terrorist attacks, notably the bombing of the
US embassy in Kenya. The US has deliberately left open the question of whether
it can pin this week's outrage on Mr bin Laden. But, as one US diplomat notes,
in the current climate his previous record guarantees that he will be a target.

Brent Scowcroft, former national security adviser to presidents Gerald Ford and
George Bush Senior, says some form of military action is inevitable. But this is
far less important than pursuing the goal of long-term co-operation with the
allies. "This (terrorism) is not an issue where unilateralism is going to be
effective. In all frankness, bombing terrorist camps does little good."

As Mr Bush embarks on the first phase of his war on terrorism, he faces a
dilemma. Ideally, he would choose military targets that have the broad support
of allies and do not threaten an even more violent backlash not just against the
US but also against weak Arabs in the region. This alone is difficult enough,
especially as the Americans are in no mood to produce proof good enough to pass
muster in a court. It may require the US to forgo full Nato support and go alone
with a "coalition of the willing" with, say, Britain in the forefront.

But, as Gen Scowcroft argues, Mr Bush must also reinforce the gathering of
intelligence at home. This week's terrorist attacks came not in the form of
Japanese warplanes across the Pacific but from commandeered domestic flights
from Boston and Washington. To prevent a repetition of the disaster, the US will
have to control events within its own borders as well as influencing those in
other countries.

Twenty-five years ago, in the aftermath of the Watergate crisis, Congress
enacted laws that drastically reduced the CIA's ability to conduct covert
operations, including political assassinations. It also enacted wide-ranging
privacy laws that hindered domestic surveillance. In the coming months, there
will be great pressure to rewrite these laws. Mr Bush's war will have to be
fought as much at home as abroad.

LOAD-DATE: September 14, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


                   Copyright 2001 The Financial Times Limited


                             1073 of 2746 DOCUMENTS


                        Financial Times (London,England)

                           September 14, 2001 Friday
                                London Edition 1

America's war: This week's attack on the US was launched from within, and George
W. Bush's fight against terrorism will be prosecuted at home as well as abroad,
says Lionel Barber:

BYLINE: By LIONEL BARBER

SECTION: COMMENT & ANALYSIS ; Pg. 22

LENGTH: 1303 words


America fought a War on Poverty in the 1960s and a war on drugs in the 1980s.
Now, in the wake of this week's devastating assault on the Pentagon and the
World Trade Center, President George W. Bush has declared war on terrorism.

The implications of this step change in foreign policy are enormous, not only
for a traumatised America but also for the US allies that have rallied around
the stricken superpower. As Mr Bush said in his televised address to the nation
on Tuesday night: "The US will make no distinction between those who committed
these acts and those who harbour them."

In effect, the US has pledged to mobilise its formidable resources - economic,
political, military and technological - to waging a war without mercy against
terrorist groups, their patrons, even their sympathisers. At face value, this
suggests a sustained commitment against a declared enemy on a scale not seen
since the start of the cold war, when President Harry S. Truman declared in
early 1946 that he was tired of "babying the Soviets", that they understood only
"an iron fist and strong language".

Some will dismiss Mr Bush's words as the rage of the impotent. Others will argue
that wars against implacable enemies willing to give up their lives for
martyrdom are inherently unwinnable. The administration sees things differently.
"Fighting terrorism has always been important for the US," says Reginald
Bartholomew, a former top State Department diplomat who was ambassador in
Lebanon in 1983 when terrorists blew up a US barracks, killing 242 marines. "But
now it will become the number one priority. It will become the touchstone for
the alliance."

The world's initial response has been an impressive show of solidarity.
Spontaneous demonstrations took place in the streets of Berlin. Unequivocal
condemnation of the terrorist attacks echoed across Paris. Wreaths were laid in
Moscow. The most valuable expression of collective resolve came late on
Wednesday evening in Brussels, when Nato ambassadors invoked for the first time
Article 5 of the alliance's charter. The clause states that an attack against
one member is an attack on the alliance.

Not even during the height of the Cuba missile crisis, when the US and Soviet
Union came to the brink of nuclear war, was Article 5 invoked. The Brussels
resolution, therefore, appears to commit Nato fully to Mr Bush's new war.

In reality, allied support is more nuanced. Several Nato members, including
Britain, have insisted that there is no "blank cheque" for US military action.
Others, notably Turkey, worry about guaranteeing US access to their airspace and
bases lest they become vulnerable to reprisals. In Germany, Otto Schily,
interior minister, noted pointedly that there was no current terrorist threat to
the country. But this could change, depending on the type of military action the
US chose to pursue.

However genuine this week's expressions of condolence, there were already doubts
in Europe about the thrust of the Bush administration's foreign policy before
the attack. The optimistic view is that a new common war against terrorism could
bridge divisions. The alternative is that it could increase tensions.

One long-standing European concern has been the US plan to deploy national
missile defence, which many fear could provoke a crisis with the Russians or the
Chinese. A separate worry in Europe is what is seen as the administration's
combination of high-handed unilateralism and virtual disengagement in the
Balkans and the Middle East.

A senior European official complains that the administration's desire to
distance itself from its predecessor has led to an "anything but Clinton"
policy. Willy-nilly, this has allowed a vacuum to develop in which Prime
Minister Ariel Sharon has felt able to pursue a relentlessly hard-line approach
toward the Palestinian conflict and the Palestine Liberation Organisation. "It's
simply no good just blaming (Yassir) Arafat," he says.

Suggestions that a more even-handed US policy toward the Arab-Israeli conflict
could have prevented this week's terrorist outrages are enough to make US
officials incandescent with rage. In their view, the causes of terrorism go far
beyond the Arab-Israeli conflict. They extend to a fundamental cultural divide
between those who view the US as the Great Satan and those who support America
as exponent of the values of the modern world.

So what are the options for the administration? In the first instance, says one
official, the US will be far more open to sending in ground forces to capture or
kill terrorists or to punish regimes that aid or abet them. This would mark a
shift in the Pentagon's policy of using precision bombing as its weapon of
choice. It would overturn a US reluctance to commit ground forces that has
existed since the 1993 debacle in Somalia, in which US rangers were killed and
dragged through the streets.

Second, the administration is likely to take an even tougher line with countries
suspected of sponsoring terrorism or "accomplice" states. The last State
Department report on state- sponsored terrorism included six countries: Iran,
Iraq, Syria, Libya, North Korea and Sudan. In each case, says one official, the
US will use every available means to detect whether there are direct links
between the regime and terrorist groups and will hold open the threat of
punishment.

The third and final category concerns "fellow travellers" - countries such as
Aghanistan or Pakistan with governments that may not actively support the
terrorist groups within their borders but are unwilling or unable to do anything
about it.

Much attention has focused on Osama bin Laden, the renegade Saudi terrorist
believed to be in Afghanistan. Mr bin Laden, who was reported to be under house
arrest, has been tied to several terrorist attacks, notably the bombing of the
US embassy in Kenya. The US has deliberately left open the question of whether
it can pin this week's outrage on Mr bin Laden. But, as one US diplomat notes,
in the current climate his previous record guarantees that he will be a target.

Brent Scowcroft, former national security adviser to presidents Gerald Ford and
George Bush Senior, says some form of military action is inevitable. But this is
far less important than pursuing the goal of long-term co-operation with the
allies. "This (terrorism) is not an issue where unilateralism is going to be
effective. In all frankness, bombing terrorist camps does little good."

As Mr Bush embarks on the first phase of his war on terrorism, he faces a
dilemma. Ideally, he would choose military targets that have the broad support
of allies and do not threaten an even more violent backlash not just against the
US but also against weak Arabs in the region. This alone is difficult enough,
especially as the Americans are in no mood to produce proof good enough to pass
muster in a court. It may require the US to forgo full Nato support and go alone
with a "coalition of the willing" with, say, Britain in the forefront.

But, as Gen Scowcroft argues, Mr Bush must also reinforce the gathering of
intelligence at home. This week's terrorist attacks came not in the form of
Japanese warplanes across the Pacific but from commandeered domestic flights
from Boston and Washington. To prevent a repetition of the disaster, the US will
have to control events within its own borders as well as influencing those in
other countries.

Twenty-five years ago, in the aftermath of the Watergate crisis, Congress
enacted laws that drastically reduced the CIA's ability to conduct covert
operations, including political assassinations. It also enacted wide-ranging
privacy laws that hindered domestic surveillance. In the coming months, there
will be great pressure to rewrite these laws. Mr Bush's war will have to be
fought as much at home as abroad.

LOAD-DATE: September 14, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


                   Copyright 2001 The Financial Times Limited


                             1074 of 2746 DOCUMENTS


                        Financial Times (London,England)

                           September 14, 2001 Friday
                                London Edition 2

Fear comes to 4m Arab-Americans CIVILIAN ANGER:

BYLINE: By ANDREW EDGECLIFFE-JOHNSON, CAROLA HOYOS and SHEILA MCNULTY

SECTION: ASSAULT ON AMERICA INVESTIGATIONS ; Pg. 6

LENGTH: 339 words

DATELINE: NEW YORK and HOUSTON


With US officials increasingly blaming Osama bin Laden, the Islamic
fundamentalist, as the mastermind behind the terrorist attacks, Arab communities
across the country are bracing themselves for retaliation from angry US
civilians.

"Things are happening so fast, we are extremely concerned," said Khalil Jahshan,
vice president of the American-Arab Anti-Discrimination Committee, the largest
grassroots Arab-American civil rights organisation.

Death threats and verbal harassment have been reported throughout the country by
Muslims, and by people who have been mistaken for them.

Hate messages have also been left on internet message boards. The most serious
incident occurred the night after the Twin Tower attacks.

Gunshots shattered windows at an Islamic centre that houses a mosque and a
school in a Dallas, Texas, suburb. Several bomb threats shut Arab-American
charter schools near Detroit, home to one of the largest Arab communities in the
US.

Lawmakers across the country, including Rudolph Giuliani, mayor of New York,
have appealed for restraint to Americans spurred on by pictures from the Middle
East of Palestinians celebrating America's tragedy, even as Arab leaders
condemned the attack.

European and Arab diplomats at the United Nations say the attack, if perpetrated
by an Islamic terrorist, would probably shift US political sentiment further
towards Israel.

What worries Mr Jahshan more than the threats that have prompted the need for a
Washington DC police officer to stand guard outside his office, is the lasting
effects Tuesday's terrorist attacks will have on the civil liberties of
Americans, especially the 4m Arab-Americans.

If authorities confirm Islamic extremists were behind the attack, Arab- American
leaders fear the subtle anti-Arab sentiment within the country, partially driven
by Washington's support of Israel and its experiences with countries such as
Libya and Iraq, will become more aggressive. Additional reporting by Andrew
Edgecliffe-Johnson in New York and Sheila McNulty in Houston

LOAD-DATE: September 14, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


                   Copyright 2001 The Financial Times Limited


                             1075 of 2746 DOCUMENTS


                        Financial Times (London,England)

                           September 14, 2001 Friday
                                London Edition 2

Fear comes to 4m Arab-Americans CIVILIAN ANGER:

BYLINE: By ANDREW EDGECLIFFE-JOHNSON, CAROLA HOYOS and SHEILA MCNULTY

SECTION: ASSAULT ON AMERICA INVESTIGATIONS ; Pg. 6

LENGTH: 339 words

DATELINE: NEW YORK and HOUSTON


With US officials increasingly blaming Osama bin Laden, the Islamic
fundamentalist, as the mastermind behind the terrorist attacks, Arab communities
across the country are bracing themselves for retaliation from angry US
civilians.

"Things are happening so fast, we are extremely concerned," said Khalil Jahshan,
vice president of the American-Arab Anti-Discrimination Committee, the largest
grassroots Arab-American civil rights organisation.

Death threats and verbal harassment have been reported throughout the country by
Muslims, and by people who have been mistaken for them.

Hate messages have also been left on internet message boards. The most serious
incident occurred the night after the Twin Tower attacks.

Gunshots shattered windows at an Islamic centre that houses a mosque and a
school in a Dallas, Texas, suburb. Several bomb threats shut Arab-American
charter schools near Detroit, home to one of the largest Arab communities in the
US.

Lawmakers across the country, including Rudolph Giuliani, mayor of New York,
have appealed for restraint to Americans spurred on by pictures from the Middle
East of Palestinians celebrating America's tragedy, even as Arab leaders
condemned the attack.

European and Arab diplomats at the United Nations say the attack, if perpetrated
by an Islamic terrorist, would probably shift US political sentiment further
towards Israel.

What worries Mr Jahshan more than the threats that have prompted the need for a
Washington DC police officer to stand guard outside his office, is the lasting
effects Tuesday's terrorist attacks will have on the civil liberties of
Americans, especially the 4m Arab-Americans.

If authorities confirm Islamic extremists were behind the attack, Arab- American
leaders fear the subtle anti-Arab sentiment within the country, partially driven
by Washington's support of Israel and its experiences with countries such as
Libya and Iraq, will become more aggressive. Additional reporting by Andrew
Edgecliffe-Johnson in New York and Sheila McNulty in Houston

LOAD-DATE: September 14, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


                   Copyright 2001 The Financial Times Limited


                             1076 of 2746 DOCUMENTS


                        Financial Times (London,England)

                          September 13, 2001 Thursday
                                London Edition 1

Oil prices fall back on concern about declining demand FUEL FEARS:

BYLINE: By DAVID BUCHAN and SHEILA MCNULTY

SECTION: ASSAULT ON AMERICA WORLD ECONOMY ; Pg. 5

LENGTH: 612 words

DATELINE: LONDON and HOUSTON


Oil prices on the London futures market fell back yesterday as the worries about
supply interruptions that caused Tuesday's immediate price surge gave way to
concerns about declining demand for the world fuel.

The Opec cartel, controlling around a third of world output, gave assurances of
supplies in the wake of Tuesday's terrorist attacks on the US. Opec members are
committed "to guarantee sufficient oil supplies", said Ali Rodriguez, Opec
secretary-general, though he saw no reason for any increase now.

The main question for the world oil market is whether any Middle East producing
state is discovered to have been behind the suicide attacks. US President George
W. Bush made clear the US would retaliate against any state "harbouring" the
terrorists. The US has in the past accused three Opec members, Iraq, Iran and
Libya, of sponsoring "state terrorism".

According to a UBS Warburg report yesterday, the most likely outcome is that
there will be continued tension in the oil market, due to some Arab involvement
or support for those deemed responsible for the attack, leading to higher oil
prices. It rated as a "low probability" the possibility that the attacks were
not connected to the Middle East and that any US response would have no knock-on
effects in the region.

In the absence of direct Arab implication in these attacks, "the market is more
concerned about demand, and what the impact (of Tuesday's events) is on the pace
of global recovery," said Klaus Rehaag, editor of the International Energy
Agency's monthly oil report. The IEA's latest report, released yesterday but
prepared before the attacks, said industrialised countries's total oil stocks
had fallen below last year's levels, creating "market fragility and greater
vulnerability to external shocks". But, significantly, it pointed out that North
American stocks were above the OECD average.

"The main risk is likely to be to confidence - frightened consumers don't spend,
but hoard," said Andew Oswald, a University of Warwick economist.

A leading US energy expert, Amy Myers Jaffe of Houston's Rice University, said
it was not surprising "the oil market is a little jittery" because of concerns
that oil-producing countries might have helped the terrorist attackers and
because of the prospect of US retaliation. "Any time there is a threat of
military action in the Middle East, an area through which huge amounts of oil
pass, people are always a little bit concerned about what it might mean for
long-term prices", she said.

But Ms Jaffe said it was no reason to panic or to stock up on gas, or to believe
that oil facilities would be targeted. "That has not been the pattern to
international terrorism."

Adam Sieminski, a US-based analyst for Deutsche Bank, said he expected the
attacks to "increase the desire for (US) energy independence".

This week, the Senate energy committee had been due to work on its version of an
energy bill in which the House of Representatives has already voted to open up
Alaska's wildlife reserve to oil exploration. The US imports more than 10m b/d
of the nearly 20m barrels it consumes daily.

As a legacy from the 1973 Arab oil embargo, IEA member countries keep stocks
covering at least 90 days of oil imports, while the US has its own Strategic
Petroleum Reserve. Former President Bill Clinton took 30m barrels out of this to
damp prices last year but it is now being refilled and currently totals 544m
barrels.

However, two smaller non-IEA Asian countries took precautionary measures
yesterday. Taiwanese refiners said they were stopping product exports, while
Thailand ordered refiners to increase products from 3 to 5 per cent of daily
demand.

LOAD-DATE: September 12, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


                   Copyright 2001 The Financial Times Limited


                             1077 of 2746 DOCUMENTS


                        Financial Times (London,England)

                          September 13, 2001 Thursday
                                London Edition 1

Military options examined to aid US response TRANSATLANTIC ALLIANCE:

BYLINE: By JIMMY BURNS, SARAH NEVILLE and ANDREW PARKER

SECTION: ASSAULT ON AMERICA BRITAIN ; Pg. 10

LENGTH: 550 words


Britain yesterday considered what military support it could provide to the US in
any retaliation for the attacks on New York and Washington.

A Whitehall official said Britain could participate in military operations
mounted by the US, or provide logistical support.

"Nothing is excluded," said the official, who stressed no decisions had been
taken. "People are looking to be ready if there is a request from the US."

Jack Straw, foreign secretary, said: "The UK is already offering a great deal of
intelligence and security co-operation. We stand ready, like other European
nations, to offer any other assistance."

Nato yesterday considered its response to the attacks on New York and Washington
but defence analysts said Britain was the alliance member best placed to
participate in any US military operations.

Rear Admiral Richard Cobbold, director of the Royal United Services Institute, a
defence think-tank, said: "If there was overwhelming evidence of state
involvement (in Tuesday's attacks) then certainly Britain has got the capability
to co-operate with the Americans directly and militarily. We have Tomahawk
ground attack missiles that can go just about anywhere."

The UK is about to start its biggest military exercise since the mid-1980s. The
exercise in Oman involves 24,000 troops and large numbers of aircraft and ships.

They include the nuclear submarines HMS Superb and HMS Trafalgar, the aircraft
carrier HMS Illustrious and the helicopter carrier HMS Ocean. Trafalgar carries
Tomahawk missiles.

The Ministry of Defence said there were no plans to abandon the exercise but
stressed it was not related to Tuesday's attacks.

Defence analysts said the most valuable and immediate assistance that Britain
could provide the US was intelligence. MI5, the security service, MI6, the
secret intelligence service, and GCHQ, the listening station at Cheltenham, face
an unprecedented challenge.

"The fact that there were English as well as other non-US citizens who were
victims of the attack means that US and the British and other governments are
bonding in a multinational effort to prevent this ever happening again," said
Nigel Churton, the managing director of Control Risks, the UK-based risk
assessment and security firm.

Baroness Thatcher, the former prime minister, was embroiled in controversy in
1986 after she permitted US aircraft based in Britain to make attacks on Libya.
But the official said yesterday that Britain would consider a similar request by
the US in the wake of Tuesday's attacks.

The official suggested Diego Garcia, the British territory in the Indian ocean,
may be relevant. It has a big US military presence.

Britain has a communications centre at its base on Cyprus that could be
important in any Middle East military operations.

The UK and the US have regularly stood together in military operations, partly
because of the so-called special relationship. But the collaboration is also
driven by the close integration of military command and control systems. France,
the other significant military power in the EU, does not have the same
technological integration with the US.

During the Gulf war in 1991, for example, British warships gave protection to
the US fleet. There was also close collaboration during the Nato action against
Yugoslavia in 1999.

LOAD-DATE: September 12, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


                   Copyright 2001 The Financial Times Limited


                             1078 of 2746 DOCUMENTS


                        Financial Times (London,England)

                          September 13, 2001 Thursday
                                 USA Edition 1

Palestiniansfear Israeli attacks MIDDLE EAST:

BYLINE: By Ralph Atkins in Jerusalem

SECTION: ; Pg. 8

LENGTH: 548 words


Palestinians yesterday accused Israel of using the tragedy in the US as cover
for military operations around Jenin, in the occupied West Bank, which they said
killed 10 Palestinians.

In fierce overnight fighting Israel underscored its determination to confront
militants suspected of terrorism. But with US and European attention diverted by
the attacks in the US, Palestinians feared unbridled Israel military responses
in the occupied West Bank and Gaza Strip.

Recent suicide bombings inside Israel originated from Jenin, according to the
Israeli military. Israeli tanks had seized positions in Jenin earlier on Tuesday
in areas under Palestinian control.

Tensions rose as the possibility that the US attacks might have links with the
Palestinian cause raised the spectre of retaliatory US military strikes that
would further destabilise the region.

President George W. Bush's promise to avenge the attacks and "make no
distinction between the terrorists who committed these acts and those who
harbour them" raised alarm in a region where some governments are accused by the
US of aiding terrorism.

The concern was underlined by the chorus of condemnation emanating from Arab and
Muslim capitals. In Iran, which is on the list of the US State Department's
sponsors of terrorism, President Mohammad Khatami denounced the attacks. Muammar
Gadaffi, leader of Libya, which was bombed by the US in 1986 in retaliation for
a terrorist attack, offered aid to the victims of the "gruesome act".

Islamic groups also sought to distance themselves. The Muslim Brotherhood,
Egypt's main Islamist group, said the attacks contradicted "human and Islamic
values". Mohammed Hussein Fadlallah, Lebanon's leading Shia cleric, said: "No
rational person can accept any people being exposed to what the American people
have been exposed to."

The attacks on the US have increased the pressure on Yassir Arafat, the
Palestinian leader, who yesterday postponed a two-day visit to Syria, where he
hoped to cement a reconciliation after more than 20 years of acrimonious
relations.

Palestinians argue that their uprising against Israel's occupation of the West
Bank and Gaza Strip cannot be calmed without political concessions by Israel -
at the minimum, a freeze on the expansion of Jewish settlements in occupied
territories. But after Tuesday's events, the west's determination not to reward
violence means Mr Arafat will be under still stronger pressure to curb
Palestinian attacks before any negotiations begin.

Palestinian efforts to distance themselves from the attacks in the US - and the
genuine expressions of horror - were undermined by televised scenes of
anti-American jubilation on Tuesday night in areas occupied by Israel.
Palestinian officials said reports of celebrations had been manipulated.

Israeli officials said Ariel Sharon, Israel's prime minister, did not regard the
constraints on Israel's military as having been lifted. "We could have done much
more, but the factor preventing us was not the international condemnation but
because we don't want the situation to destabilise," said one diplomat. Instead,
the prevailing mood in Israeli ministries yesterday was also of shock at the
extent of the tragedy in the US, which took terrorism to extremes not imagined,
even in Israel.

LOAD-DATE: September 12, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


                   Copyright 2001 The Financial Times Limited


                             1079 of 2746 DOCUMENTS


                        Financial Times (London,England)

                          September 13, 2001 Thursday
                                London Edition 1

The value of pre-emptive force: Action against states sheltering or sponsoring
terrorists is indispensable, says Jeffrey Gedmin:

BYLINE: By JEFFREY GEDMIN

SECTION: COMMENT & ANALYSIS ASSAULT ON AMERICA ; Pg. 21

LENGTH: 890 words


It will take weeks,and perhaps months, for the US to sift through the details
and establish clear and compelling evidence of culpability for this week's
murderous terrorist attacks. President George W. Bush has promised a severe
reply for the perpetrators. Colin Powell, US secretary of state, has pledged to
bring "those responsible to justice".

It is politically convenient to concentrate on apprehending individual
terrorists - this is an important part of the problem. But terrorism has long
ceased to be merely a criminal justice problem. What of the state that makes the
terror possible?

In the US, the debate about justice and retaliation is almost certain to give
way to a fuller debate about pre-emptive strikes. It will be controversial, not
least with many of our closest allies. If pursued properly, however, the
pre-emptive use of force offers the best assurance that vicious terrorist
attacks are less likely to occur in future.

Consider the case of Osama bin Laden, the wealthy Saudi national whose network,
at least initially, has emerged as a prime suspect in the World Trade Center and
Pentagon attacks. Mr bin Laden has been wanted for questioning about alleged
links to the bombing of US military bases in Saudi Arabia.

Ramzi Yousef, the apparent mastermind of the 1993 World Trade Center bombing,
was said to have had Mr bin Laden's address in his pocket when he was arrested
in Pakistan last year. The US State Department describes him as "one of the most
significant financial sponsors of Islamic extremist activities in the world".
There are indications that groups tied to Mr bin Laden were responsible for US
embassy bombings in Kenya and Tanzania in 1998.

If Mr bin Laden's fingerprints are on the most recent acts of terror, the US can
be expected to intensify its search for him and his accomplices. Mr Bush has
indicated, moreover, that the US will make no distinction between the terrorists
and those who harbour them. This has given rise to the assumption that the US
will strike the Taliban regime of Afghanistan, which has provided Mr bin Laden
with aid and protection. But what if the evidence in this instance is
unobtainable or inconclusive? Even in these circumstances, it would be wrong for
the US to rule out such attacks, because, put simply, they are likely to
diminish the possibility of future acts of violence.

The issue of states sponsoring terrorism is hardly a new one. Consider the Pan
Am bombing. A Scottish court in the Netherlands found a Libyan intelligence
agent guilty of planting the bomb that brought down Pan Am flight 103 over
Lockerbie, murdering 270 people in 1988. To an extent, some justice has at last
been done. Libya even co-operated in the end in turning suspects over to the
court. But it remains a paradoxical justice. There is little doubt in
intelligence circles that the order for the attack came from the Libyan
government itself.

Similarly, for many years the Syrian government has sponsored terrorism and
provided terrorists with a base from which to train and to operate. And the
Iranians, even in the era of reform, have continued to finance and to nurture
Hezbollah and Hamas, terrorist groups.

In fact, it is hard to conceive of many of the world's leading terrorist groups
flourishing without the protection and assistance of governments. How much more
difficult and costly would it be for the likes of Mr bin Laden if he knew that a
country such as Afghanistan were not at his disposal for territorial protection,
training facilities and perhaps even logistical assistance?

It is true that pre-emptive strikes raise difficult legal and political
questions. In 1981, when Israel attacked a nuclear reactor outside Baghdad,
Menachem Begin, then Israeli prime minister, argued that the strike was
defensive in character. The United Nations General Assembly disagreed and
roundly condemned Israel. Even the Reagan administration felt compelled to
criticise Israel.

However, the CIA argued at the time that Iraq was indeed planning to build
nuclear weapons. King Hussein watched Israeli planes fly over Jordanian airspace
without phoning his Arab brother Saddam Hussein to warn him. And a decade later
came Iraq's invasion of Kuwait and much fuller knowledge about Iraq's intentions
and capabilities. History suggests that Israel was right.

When President Ronald Reagan attacked Libya in 1986, the action was planned as
retaliation and to raise the cost of terrorism to Muammer Gadaffi, the Libyan
dictator. Although Mr Gadaffi escaped injury, the blow to his family seems to
have had an extraordinary effect. The wave of terrorism he had promoted suddenly
subsided until Lockerbie.

Of course, pre-emptive strikes are not foolproof. No set of measures - certainly
none that a democracy will ever contemplate - will bring us close to
invulnerability. A combination of methods will be necessary in any event. And
discretion and selection of targets will always be sensitive. Still, if the US
insists on focusing on the retaliation for the most recent acts, and hunting
down the criminals currently involved, it will dodge the most serious
responsibility of all: reducing the probability of such barbaric attacks in the
future.

The writer is a resident scholar at the American Enterprise Institute in
Washington and executive director of the New Atlantic Initiative

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                        Financial Times (London,England)

                          September 12, 2001 Wednesday
                                London Edition 1

Worst attack on US since Pearl Harbor

BYLINE: By FARHAN BOKHARI, HARVEY MORRIS, PETER SPIEGEL and RICHARD WOLFFE

SECTION: AMERICA S DAY OF TERROR ; Pg. 5

LENGTH: 878 words

DATELINE: LONDON , ISLAMABAD and WASHINGTON


The organisation, sophis-tication and range of yesterday's attacks - the worst
onslaught against US territory since Pearl Harbor - went beyond anything
witnessed in post-war terrorism.

But unlike Pearl Harbor, the perpetrators have yet to be identified, leaving
President George W. Bush unable to respond with speedy and forceful retaliation.

In 1995, US officials and the public jumped to the conclusion that the Oklahoma
bombing which killed 168 people was the work of Middle Eastern terrorists, only
to discover that it was carried out by a homegrown bomber, Timothy McVeigh.

Yesterday's attacks would have required possibly dozens of individuals to
co-ordinate and equip the hijackers who carried out the suicide attacks,
according to anti-terrorism experts.

Bruce Hoffman, director of the influential Rand Corporation's Washington office
and author of "Inside Terrorism", said multiple hijackings from different
airports within the US would take tremendous organisation.

"It has to have the resources, financing, training operations, and the will, so
you're really talking about a sophisticated organisation," Mr Hoffman said.

If the plan and the perpetrators originated outside the US, it would have been a
massive and risky operation to get them there. Terrorists on the move need
documents and safe houses. There is a constant risk that word of such
preparations will leak out.

Western intelligence agencies constantly monitor the movement of terrorist
suspects and members of terrorist cells and "sleepers" are often left
undisturbed, so that they can be monitored without their knowledge.

Modern surveillance equipment is increasingly sophisticated and includes
automated monitoring of telephone communications around the world.

But fears have been expressed among western intelligence services that terrorist
groups may be using equal sophisticated counter-measures on the internet to plan
their attacks.

"Uncrackable encryption is allowing terrorists to communicate about their
criminal intentions without fear of outside intrusion," Louis Freeh, then
director of the Federal Bureau of Investigation, told the Senate in March:
"They're thwarting the efforts of law enforcement to detect, prevent and
investigate illegal activities."

Experts claim encrypted messages and blueprints can be passed around the world
using pornographic sites and web chatrooms.

The received wisdom among intelligence services is that terrorist groups
invariably need one or more state sponsors to carry out even one successful
operation.

Thus, the 1986 bombing of a Berlin disco in which three people were killed and
the bombing of a PanAm airliner over Lockerbie were both traced to Libya. Iran
was the prime suspect behind Islamic bombers who attacked the US embassy in
Beirut in 1983 and went on to kill or wound more than 200 US marines at their
base in the Lebanese capital.

Iraq has the motivation and the expertise to have mounted yesterday's attacks
but it is difficult to see how it could have deployed the means necessary to
carry them out, given its present isolation.

The belief in inevitable state involvement has been somewhat overturned by the
activities of Osama Bin Laden, the FBI's most wanted man, who has managed to
mount international operations from his effectively autonomous base in
Taliban-controlled Afghanistan. His supporters are drawn from an Islamic
international group, whose members include former volunteers in the war against
Soviet occupation.

Experts in neighbouring Pakistan nevertheless believe yesterday's attacks may
have been beyond even Bin Laden's capabilities alone. The US is potentially
vulnerable to coalitions of groups that seek to attack western targets, and they
acknowledged Bin Laden might have been involved in aspects, such as the training
of the perpetrators.

Bin Laden, a dissident Saudi, is wanted in connection with the 1998 bombing of
two American embassies in East Africa. His group - known as Al-Quaida - was
among the prime suspects in last year's bombing of the USS Cole off the coast of
Aden.

A videotape of Bin Laden has been circulating in the Middle East in which he
says last year's attack on the Cole was just the beginning of a campaign and
calling for further attacks on US targets, according to author Peter Bergen.

Mr Bergen, who is about to publish a book on Bin Laden, said: "We have to ask
ourselves who is capable and motivated to do this. At the top of the list is
Osama bin Laden. You are looking at an incredibly sophisticated bombing
operation. You need to have suicide bombers as well as people who are skilled in
flying commercial aircraft. This is not some American militia group or
Palestinian group."

Experts said that the most troubling aspect of yesterday's attack was the
ability of terrorists to circumvent domestic security arrangements at airports,
particularly as there has not been a successful domestic hijacking of a US
aircraft in decades.

They noted that counter-terrorist intelligence is often hard to come by, so the
best way to block terrorist attack is frequently through physical security
measures. One expert said, however, that US airports tend to have some of the
loosest security among the industrialised nations. Additional reporting by
Farhan Bokhari in Islamabad

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                        Financial Times (London,England)

                          September 12, 2001 Wednesday
                                London Edition 1

Libya pledge in Caribbean worries US: Poor islands are happy with Gadaffi offer
to give cash and buy bananas but Washington is not, reports Canute James

BYLINE: By CANUTE JAMES

SECTION: LATIN AMERICA AND THE CARIBBEAN ; Pg. 13

LENGTH: 771 words


For small eastern Caribbean islands seeking escape from economic stagnation,
anew and controversial source of help is promising much.

The islands' governments have grabbed at a Libyan promise to allow them access
to a Dollars 2bn (Pounds 1.2bn) development fund. Libya has also promised to
purchase at high prices all the bananas on which some of the islands depend, and
to give the countries Dollars 21m immediately.

The promised aid, agreed during recent talks in Libya between three Caribbean
prime ministers and Muammer Gadaffi, Libya's president, has caused concern among
other Caribbean leaders.

Libya's increasingly strong influence in the Caribbean is also causing concern
in Washington, where US legislators recently voted for a five-year extension of
economic sanctions against Tripoli. The US and some other countries imposed the
sanctions because they believe the Libyan government has not taken
responsibility for the 1988 bombing of a Pan Am flight over Lockerbie, Scotland,
in which 270 people died.

"Our co-operation with Libya is not based on ideology," said Pierre Charles,
prime minister of Dominica, who visited Tripoli with his colleagues from St
Vincent and Grenada. "We want to get technical and economic assistance for our
countries.

"We are not doing anything to antagonise the US. But the US would recognise
that, as tiny countries, we have to find the ways and means of raising the
living standards our of people, and dealing with the serious debt burden that we
have."

In deciding to visit Libya seeking aid, the region's leaders said they faced
increasingly intractable problems. Their economies, based mainly on bananas and
tourism, are threatened by the deregulation of preferred markets on which they
have depended.

Heavily indebted, they say aid for the Caribbean from the US last year totalled
Dollars 120m, just over a half of the amount a decade ago, and Dollars 70m of it
went to Haiti.

Five prime ministers originally had agreed to visit Colonel Gadaffi. Denzil
Douglas of St Kitts-Nevis and Lester Bird of Antigua pulled out of the mission.
"There is nothing wrong with the concept of visiting Libya," said Mr Bird. "That
is why initially I had agreed to it.

"However, in reviewing the decision, and in talks with my cabinet, it was
pointed out that there was inadequate preparation for the trip."

He said it was "ludicrous" to suggest that he pulled out because of objections
by the US. Antigua is among the countries that will get some of the promised
Dollars 21m.

"The US has no desire, and sees no need, to dictate to other countries how they
should conduct their foreign affairs," a spokesman for the US State Department
said yesterday.

However, such official calm masks clear concerns. "The Caribbean is
strategically important to the US - it is economically important for shipping,"
said a US diplomat in the region. "We will be worried if there is to be
significant influence on the region's governments by elements that clearly have
a poor and frightening record of doing anything to get their way."

Libya's promise has also worried other Caribbean leaders. Basdeo Panday, prime
minister of Trinidad and Tobago, said he was concerned about the implications of
his colleagues' visit to Libya when there were concerns about Libya's
connections in the Caribbean.

Saying he would not tell his colleagues how to conduct their business, Owen
Arthur, prime minister of Barbados, said regional governments should be careful
about agreements they were signing. He said, however, that some countries in the
region needed financial assistance. "It is very difficult to transform a banana
economy in a small state."

Government officials in the eastern Caribbean are guarded about the timing of
their access to the promised aid. They said Libya would send a mission to the
region shortly to discuss the details, and to examine the prospects for Libyan
investments in resort hotels and the write-off of existing loans, including
Dollars 6m owed by Grenada.

"The discussions will also deal with the sale of our bananas, and the prices we
will get, as our fruit is now sold to the EU, although the future of the market
is uncertain," said a St Vincent official.

The region's leaders maintain that the economic pressures they are encountering
cannot be resolved by awaiting increased assistance from the industrialised
countries.

"Our economies are affected just like the economies of the developed countries,"
said Mr Charles. "If the developed countries are saying that they are into a
recession, then one can imagine what is happening to the smaller economies like
those in the Caribbean."

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                        Financial Times (London,England)

                           September 10, 2001 Monday
                                London Edition 3

Zimbabwe farmers welcome deal on land

BYLINE: By TONY HAWKINS

SECTION: MIDDLE EAST, AFRICA & ASIA-PACIFIC ; Pg. 11

LENGTH: 424 words

DATELINE: HARARE


Zimbabwe's Commercial Farmers Union yesterday ended speculation over its
response to the Nigerian-brokered deal aimed at ending the country's land crisis
by welcoming the deal and calling on the government to ensure its
implementation.

However, the deal did not stop 150 settlers seeking to take over a farm in the
Beatrice area near Harare on Saturday.

Several occupations of white-owned farms were also reported from the Mvuuri
tobacco-growing area north-east of Harare. On both occasions there was no police
intervention.

The CFU said the Abuja declaration represented "a homegrown and internationally
accepted solution to the Zimbabwe land crisis". At a time when its members were
under siege in different parts of the country, the CFU said: "We have great
confidence in the ability of our government to implement the agreement, and we
are happy to see that they acknowledge the necessity to return to the rule of
law."

On his return to Harare yesterday from Libya where he had been negotiating
economic aid, President Robert Mugabe said: "It is a victory for us and the
farmers because they need to be compensated. We were fighting for the farmers to
be compensated and they should have realised that."

He said it was critical for Zimbabwe that the Abuja meeting had reaffirmed that
land was at the core of the crisis. "It is going to be settled by us as the
government on the basis of our constitution and law," he said.

But some analysts said the Abuja deal was "unravelling" due to a "huge gap"
between the British and Zimbabwean interpretations of the deal. "The government
thinks it has got the money without having to deliver anything," one said.

"The two sides are on different planets," said a farming industry source.

Stan Mudenge, Zimbabwe foreign minister, contradicted the UK interpretation of
the agreement, saying that only 5 per cent of white- owned farmland was covered.

According to Joseph Made, agriculture minister, the UK position had been: "Let
us take what the Zimbabwe Minister of Lands and Agriculture (himself) has put on
the table. That is very positive." Settlers would remain on all the farms they
had occupied, he insisted.

Zimbabwe's main opposition party remained doubtful about whether the deal marked
a change in the tense political atmosphere. "What the British think they agreed
at Abuja and what is happening on the farms and in the elections this weekend
are two very different things," said a spokesman for the opposition Movement for
Democratic Change. For regional reports, www.ft.com/mideastafrica

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                        Financial Times (London,England)

                           September 8, 2001 Saturday
                                London Edition 1

Zimbabwe land deal greeted by scepticism

BYLINE: By TONY HAWKINS and MICHAEL HOLMAN

SECTION: ASIA-PACIFIC & AFRICA ; Pg. 9

LENGTH: 478 words

DATELINE: HARARE and ABUJA


The Nigeria-brokered agreement on land resettlement in Zimbabwe was greeted with
caution, scepticism and some muted optimism in Harare yesterday.

Under the accord announced in the Nigerian capital Abuja late on Thursday,
Zimbabwe agreed to stop landless blacks from occupying white-owned farms.

Britain, the former colonial power, agreed to co-finance compensation for white
farmers whose land would be redistributed to the black majority in an orderly
way under the deal.

The country's white farmers see it as a potential lifeline, provided the
conditions enshrined in the deal are fully honoured. But late last night neither
the Zimbabwe government nor the white-dominated Commercial Farmers Union had
commented in any detail on the agreement, a delay that underlines the
wait-and-see attitude that has been adopted pending President Robert Mugabe's
return from a visit to Libya.

In the president's absence, government spokesmen are unwilling to comment, but
farming industry officials welcomed the agreement as a breakthrough that could
halt, and possibly even reverse, the precipitous decline in commercial
agriculture.

Opposition leaders have no such inhibitions. They are deeply sceptical and
highly critical.

Tendayi Biti, secretary for land affairs in the opposition Movement for
Democratic Change, described the agreement as "a short-term breathing measure"
for Mr Mugabe's government.

"Abuja represents a serious diplomatic hoodwink," by the ruling Zanu-PF party,
designed to give the government a lifeline until the 2002 presidential elections
next March, said Mr Biti.

Politicians say the opposition is dismayed at the Commonwealth's failure to
include free and fair elections among the conditions for support for Zimbabwe's
land resettlement programme.

"It could well be that Abuja will turn into a lifeline for Mugabe, helping him
to hang on to power in March," said an opposition activist.

"The reference to the government taking action against violence and intimidation
is pathetic," said a member of a human rights group.

An Amani Trust report just released showed that 73 per cent of all acts of
violence reported to the human rights group in 2000/01 were carried out by
so-called war veterans and government supporters, while another 22 per cent were
attributed to the police, army, secret service and even government ministers, he
said.

The Zimbabwe Stock Exchange was unmoved by news of the deal, and industrial
shares were only fractionally higher in thin trade. Business leaders were also
cautious declining to comment publicly until Mr Mugabe has given the Zimbabwe
government's interpretation of the agree- ment.

"On the face of it, it's excellent news," said a banker, "but we have been here
before, only to see the whole thing collapse when the talks got down to the
details. Will the deal end the violence, Page 13 www.ft.com/zimbabwe

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                        Financial Times (London,England)

                           September 8, 2001 Saturday
                                London Edition 1

Africa's deal: If it works, the Zimbabwe agreement will be a milestone, say
Michael Holman and Tony Hawkins:

BYLINE: By TONY HAWKINS and MICHAEL HOLMAN

SECTION: COMMENT & ANALYSIS ; Pg. 13

LENGTH: 1185 words


The agreement thrashed out in the Nigerian capital of Abuja on Thursday to bring
peace to Zimbabwe will have implications far beyond the borders of that
beleaguered country in southern Africa.

If it succeeds in defusing the violent divisions and paving the way for
genuinely democratic presidential elections next year, it will prove a triumph
for African-led diplomacy. It also marks an extraordinary personal success for
President Olusegun Obasanjo of Nigeria.

At the same time it represents a much-needed boost to the credibility of the
Commonwealth, the 54-nation organisation that links the former colonies of
Britain's erstwhile empire.

It is a big "if". The reaction to the deal in Zimbabwe yesterday ranged from the
downright sceptical to the cautiously optimistic. While the predominantly white
commercial farmers were upbeat, the response from the political opposition to
President Robert Mugabe was much more doubtful.

The agreement is "one of those paper things that will deliver nothing", said
Prof-essor Welshman Ncube, secretary-general of the opposition Movement for
Democratic Change.

Delegates to the talks in Abuja were quick to acknowledge that a crisis that has
brought Zimbabwe to the brink of catastrophe is far from over.

It remains to be seen whether Mr Mugabe honours his commitments. The agreement
requires him to restore the rule of law in the country, curb the political
thuggery used to terrorise opponents of his government and demoralise the
white-dominated commercial farming sector. In return, Britain has agreed to help
finance a land redistribution programme.

But the deal fails to spell out the Commonwealth and international response
should Mr Mugabe renege. Perhaps more worrying, there is a danger that the
resettlement movement led by so-called war veterans to occupy white farms has
taken on a life of its own and will prove impossible to restrain.

Whatever the outcome, thanks to Mr Obasanjo's role in Abuja, the crisis can no
longer be seen merely as a quarrel between Britain and Zimbabwe over land
reform. Jack Straw, the British foreign secretary, helped secure agreement by
keeping a low profile, privately acknowledging that there is little the UK can
do on its own.

Before Abuja, Mr Mugabe was facing huge pressures: de facto sanctions, a
collapse in foreign investment and tourist visits and an impending food
shortage. These pressures will continue, but with another dimension: Africa has
unequivocally declared its concern.

The message was hammered home in the opening address by Sule Lamido, Nigeria's
foreign minister. "Africa", he said "cannot afford another war, not least one
with racial overtones . . . The signals coming from the crisis in Zimbabwe
cannot be ignored by Africa.

"The feeling of insecurity on the part of white Zimbabweans is palpable," he
added. "The current situation, if not addressed in a forthright and definitive
manner, can only do incalculable damage to our quest for a peaceful and stable
Africa."

Equally tough, say delegates, was the contribution from South Africa's minis
ter, fearful of the consequences for his country of the growing number of
Zimbabweans fleeing south.

From South Africa, President Thabo Mbeki, joint initiator with President
Obasanjo of the conference, was watching closely as events unfolded. From
Britain, Prime Minister Tony Blair was in frequent telephone contact with key
participants.

But it was Mr Obasanjo who intervened at the critical moment. That was when Stan
Mudenge, Zimbabwe's foreign minister and chief negotiator, refused to budge on
whether international monitors would be allowed to observe next year's
presidential elections. The question was left unresolved.

For the country's opposition parties, this is critical. They see the election as
the only constitutional chance of ousting Mr Mugabe. Zimbabwe's president still
hopes that he can win re-election at next April's poll. The question is whether
he has accepted proposals that will guarantee his defeat. In Harare, there were
conflicting reactions. Jonathan Moyo, the normally outspoken and loquacious
informa tion minister, was uncharacteristically tongue-tied, referring all
questions to Mr Mudenge. That suggests that in the absence of Mr Mugabe, who is
in Libya, no firm government line had been agreed.

Mr Mudenge reiterated that provided the donor community came forward with
"adequate resources" to enable the government to take over land, there would be
no need for the "policy of desperation" of land occupations. Significantly, he
made no reference to the stringent conditions of the agreement, focusing only on
the British offer to fund the programme.

Opposition spokesmen are not hiding their scepticism. Prof Ncube was surprised
that the British government had agreed to a statement in which Mr Mugabe "gives
nothing to ensure that there will be a return to the rule of law". Mr Ncube
believes the government will not abide by the agreement, since that would be
tantamount to political suicide.

Political analysts support this, pointing out that Mr Mugabe's re-election
campaign depends on the support of the militant war veteran wing of the ruling
Zanu-PF party and on the promise of land-for-votes". Strict observance of the
Abuja agreement would put paid to both, they say.

Tendayi Biti, the MDC's shadow minister of foreign affairs, notes that the
opposition sees the absence of any specific reference to free and fair elections
in the Abuja agreement as a grave weakness. Yesterday the MDC demanded the
establishment of an independent electoral commission to run the presidential
elections scheduled for March 2002, equal access to the public media for all
parties, a revamped voters roll and free access for foreign observers and
monitors.

But the question was fudged in Abuja. Commonwealth foreign ministers have been
invited to visit Zimbabwe, and Mr Obasanjo has privately pledged that he will
personally pursue the matter with Mr Mugabe. But the monitoring issue has not
been spelt out and could yet prove a serious flaw.

Nor is there any reference to the immunity Mr Mugabe may be seeking from
prosecution for alleged human rights violations. "The past is past," said one
delegate, while another acknowledged that any attempt to indict Mr Mugabe would
get little support within Commonwealth ranks - provided of course, Mr Mugabe
kept his side of the bargain.

Mr Mugabe can argue that Britain has conceded that it has responsibility for
funding the land re-settlement programme he claims is at the heart of the crisis
by agreeing to "make a significant financial contribution."

Delegates believe that Mr Straw hinted at more money than has been pledged, but
acknowledged that no sum was mentioned. Should the agreement break down,
however, one can be sure that Zimbabwe will claim that Britain has nevertheless
broken the spirit of the agreement, if not the letter.

All these issues were acknowledged by the delegations as they left Abuja
yesterday. What happens in Zimbabwe is critical.

"We have done the impossible in a day," said one tired official late on Thursday
night: "miracles take longer".

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                        Financial Times (London,England)

                            August 28, 2001 Tuesday
                                London Edition 1

Zimbabwe will be allowed to import maize to avert food crisis

BYLINE: By NICOL DEGLI INNOCENTI

SECTION: AFRICA & INTERNATIONAL ECONOMY ; Pg. 9

LENGTH: 312 words

DATELINE: JOHANNESBURG


Countries of the Southern African Development Community (SADC) have agreed to
allow Zimbabwe to import maize from South Africa and avert a looming food
crisis.

The decision was reached at a SADC meeting in Harare at the weekend. The idea is
for South Africa not to "sell its surplus maize to people outside the region",
Joseph Made, the Zimbabwean agriculture minister, said in an interview
yesterday.

Zimbabwe would import at least 100,000 tonnes of maize, the local staple, from
South Africa, Mr Made said, which would be stored until April next year, when
the country's stocks are expected to run out.

However, local observers say Zimbabwe will need at least 600,000 tonnes of maize
to feed its population. Agricultural production has been severely affected by
the invasions of commercial farms by so-called war veterans and by the campaign
of violence against opposition supporters.

The announcement that Zimbabwe will import maize is seen as an attempt by the
ruling Zanu-PF party to prevent food riots and shore up support for President
Robert Mugabe in advance of a crucial presidential election to be held next
year. Mr Mugabe has denied Zimbabwe is facing food shortages.

Simba Makoni, the finance minister, has admitted that Zimbabwe would need to
import food but had not budgeted for the extra expense. It is still unclear how
the cash-strapped government will pay for the maize imports, unless fuel donated
by Libya has suddenly freed up funds.

South Africa and Mozambique are the only SADC countries expected to have a maize
surplus this year.

The other nine countries in the area have warned of serious cereal shortages
because of extensive flooding. Zimbabwe is the only country where agricultural
production has been hampered by politically motivated violence and not by the
weather. For more reports see www.ft.com/globaleconomy www.ft.com/mideastafrica

LOAD-DATE: August 27, 2001

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                        Financial Times (London,England)

                             August 27, 2001 Monday
                                London Edition 1

Libya to supply Zimbabwe fuel

SECTION: SHORTS ; Pg. 1

LENGTH: 24 words


Libya to supply Zimbabwe fuel

Libya has come to the aid of Zimbabwe with a one-year deal to supply fuel, the
Harare government said. Page 5

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                        Financial Times (London,England)

                             August 27, 2001 Monday
                                London Edition 1

Libya in Zimbabwe oil supply deal

BYLINE: By TONY HAWKINS

SECTION: WORLD NEWS - AFRICA & MIDDLE EAST ; Pg. 5

LENGTH: 322 words

DATELINE: HARARE


Libya has come to the aid of Zimbabwe with a one-year deal to supply 70 per cent
of the country's fuel requirements, according to the government in Harare.

However, details of the deal are hazy, as has been the case with virtually all
the emergency fuel import arrangements over the past two years.

The Libya Arab Foreign Bank is providing a Dollars 90m (Pounds 63m) revolving
line of credit on a quarterly basis, which officials say is part of a broader
agreement covering the barter of Zimbabwe exports for Libyan oil and investment
in Zimbabwe by Libyan businesses. The first fuel to be imported under the deal
is due to be sold in Zimbabwe this week.

The import deal between the state-owned National Oil Company of Zimbabwe
(Noczim) and Libya's Tamoil is said to be "in exchange for investments and
ownership of oil storage facilities and downstream distribution networks in
Zimbabwe".

Edward Chindori-Chininga, Zimbabwe's mines and energy minister, said the deal
was in response to last month's brief visit to Zimbabwe by Muammar Gadaffi, the
Libyan leader. He said the balance of Zimbabwe's fuel requirements would
continue to be imported from Kuwait and from South Africa's Engen group.

It is the second such loan from the Libya Arab Foreign Bank, which provided a
Dollars 60m oil import facility in 1999. The most significant element of the
agreement is the suggestion that Libya will participate in Zimbabwe's
privatisation programme by acquiring some of Noczim's oil storage assets.

The fuel supply situation has improved in the past two months, partly apparently
because of the sharp fall in consumption following June's 70 per cent increase
in petrol and diesel prices.

In the wake of the steep rise in Zimbabwe's inflation rate from 55 per cent in
May to 70 per cent in July, ministers and officials are anxious to reduce the
retail price of petrol. They hope the Libyan deal may pave the way for a modest
price cut.

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                        Financial Times (London,England)

                             August 24, 2001 Friday
                                London Edition 1

Go-ahead for Lockerbie appeal NEWS DIGEST

BYLINE: By MARK NICHOLSON

SECTION: NATIONAL NEWS ; Pg. 2

LENGTH: 104 words


Scotland's High Court yesterday granted leave for appeal to the Libyan convicted
of the bombing of the Pan Am jet over Lockerbie in 1988.

Grounds for the appeal were not made public and will be revealed only at the
preliminary hearing, which the court said should be held on October 15 at Kamp
van Zeist, the Scottish court on Dutch soil at which Abdel Basset Ali Mohammed
al-Megrahi was found guilty of the Lockerbie bombing in January. Five Scottish
judges will hear the appeal. The court said the preliminary hearing in October
would cover procedural and administrative matters relating to the appeal. Mark
Nicholson

LOAD-DATE: August 23, 2001

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                        Financial Times (London,England)

                             August 24, 2001 Friday
                                London Edition 1

Ten years after, Ukrainians weigh the achievements of independence: Behind the
military parades, politicians see modest progress and critics see missed
opportunities, reports Tom Warner:

BYLINE: By TOM WARNER

SECTION: WORLD NEWS - EUROPE ; Pg. 5

LENGTH: 807 words


Tanks have been rolling through the centre of the Ukrainian capital Kiev every
night this week, ahead of today's celebrations to mark the 10th anniversary of
the country's independence from the former Soviet Union. But for Anatoly
Artemenko, a veteran of the campaign for an independent Ukraine, the
militaristic tone is a disappointment.

"A big military parade is no sign of a strong, independent country," says Mr
Artemenko, who now works as a freelance television producer and cameraman. "This
is what they do in places like Libya and North Korea."

Today's parade will be the biggest display of Soviet-style military pomp seen in
Kiev since Moscow was running the show. But many ordinary Ukrainians would agree
with Mr Artemenko that the military bombast is at odds with their own experience
of the country's less than glorious performance over the past 10 years.

President Leonid Kuchma readily admits that life since independence has not
lived up to Ukrainians' aspirations, although he suggests that some of those
hopes may have been overly optimistic. "We were let out of a zoo. So if you want
France or England, excuse me," the president told a special session of
parliament on Wednesday.

Despite its economic collapse in the 1990s, Mr Kuchma said Ukraine had laid to
rest questions about its viability as an independent state. Since his
re-election in 1999, state finances have improved sharply, a point underscored
with a lavish reconstruction of Kiev's Independence Square, completed just in
time for the day's events. An economic recovery is in full swing, with growth in
gross domestic product hitting 10.5 per cent in January-July.

But disaffected critics like Mr Artemenko see mostly missed opportunities, and
argue that Ukraine's potential was at least equal to that of Poland. He worries
that Ukraine could yet end up controlled by "Russia and black Russian money".

"It's as difficult as ever to say what Ukraine is and what Ukraine will be," he
says, placing the blame on the continuing political role of former communist
leaders such as Mr Kuchma.

A newly appointed prime minister, Anatoly Kinakh, is the first who had no
position in the Soviet elite. A former shipyard engineer, Mr Kinakh says he and
many others who entered politics by running against the Communist party in
Ukraine's first elections suffered from "economic romanticism" and
underestimated the difficulty of developing a new management elite.

To be fair to Mr Kuchma, Ukraine's economy was already a wreck when he took over
in 1994.

The population, impoverished by years of hyperinflation, was naturally inclined
to blame the limited liberalisation of the economy for their plight.

Small business, which has seen the most liberalisation under Mr Kuchma - and
which is also best able to dodge lingering state interference - has enjoyed the
steadiest and most visible growth. Agriculture suffered severely during Mr
Kuchma's first term, but is now bouncing back after sweeping privatisation last
year.

Sustained growth, however, will depend on Ukraine's ability to renew its ageing
industrial base, and here the outlook is cloudiest. Steel and other base
industries have been booming since last year, driving industrial production up
20 per cent in January-July.

But market forces are only partly in play, with practically all big business
controlled by rival political groups. Few plants have undertaken the broad
restructuring they need to stay competitive in the long term, and the rare
changes in top management usually follow a political rather than economic logic.

Ukraine has lost its former position as a centre of machine-building, as most
plants failed to adjust to world markets after cold war military orders dried
up.

Even worse, the industrial infrastructure - everything from roads and train
lines to water, sewage, power stations and gas pipelines - has seen almost
complete neglect, which looms like a colossal debt on future governments.

"It can't be said that Ukraine's first decade was successful," says Leonid
Kravchuk, who led parliament during the 1991 independence vote and later became
the country's first president. "We all could have done better."

Opposition politicians, however, accuse Mr Kravchuk and Mr Kuchma of having done
well for themselves, their friends and their families while the country as a
whole suffered.

Mr Kuchma's international reputation has been damaged by a scandal last winter
in which he was accused of ordering the murder of a journalist. His domestic
approval ratings have sunk below 4 per cent, and most Ukrainians are already
looking past him and worrying about who might replace him.

The president, however, remains fully in control of the levers of state power.
Analysts expect him to favour a centrist coalition dominated by pro-Russian
industrialists in next spring's parliamentary elections.

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                        Financial Times (London,England)

                           August 15, 2001 Wednesday
                                London Edition 1

Jungle proves hot spot for international terrorism: Sandra Hernandez in Bogota
and John Murray Brown in Dublin report on links between the IRA and Colombian
rebels

SECTION: NATIONAL NEWS ; Pg. 2

LENGTH: 673 words


The image of three Irishmen in training camps in the South American jungle might
seem like something out of a Harrison Ford thriller.

But the arrest of the three IRA suspects is a reminder of the international
links between the world's most feared terrorist groups.

The three men, who have been accused of teaching Colombian rebels how to make
bombs, spent much of five weeks in warm, tropical heartland of the Colombian
Revolutionary Armed Forces, known as FARC.

They were allegedly taken from the small airport in San Vicente del Caguan to
Macarena, a small town about 100 kilometers away.

It was here that James Monaghan, Martin McCauley and a third man spent five
weeks training the rebels in the use and fabrication of homemade bombs and
mortars, according to army officials.

The news comes more than a month after one of the Colombian rebel leaders
announced they would step up their urban attacks.

FARC has increasingly used mortars and cylinder bombs in their attacks on police
and army stations, including an attack on Arbelaez, a small town located less
than an hour from the capital city of Bogota.

The three men are believed to have taught several courses on the use of the
mortars at a rebel school in Macarena, according to officials.

The news touched off fear of a new era of bomb attacks in the South American
country similar to those that took place during the era of Pablo Escobar, the
infamous leader of Medellin's cocaine gang.

Colombia's President Andres Pastrana has not publicly commented on the arrests
but it has raised concerns over the future of the haven, where the rebel's
operate unchallenged by Colombian authorities.

Mr Pastrana created the demilitarised zone in 1998 as part of his peace efforts
with the FARC. The zone is the size of Switzerland has increasing come under
fire and rebels are accused of using it to train for attacks.

The IRA's international links are well known to security forces.

Its main foreign backer in the 1980s was Libya's General Gadaffi, who is
believed to have supplied the bulk of its 2 tonnes of semtex and other weaponry.

It is understood the IRA's entree to the Colombian rebels was made through Eta,
the Basque separatists with whom the republican movement, at a political and a
military level, has strong links.

The suggestion that the men were paid for their services in cocaine would come
as little surprise to intelligence officials in Northern Ireland where the IRA
and indeed most of the paramilitary groups have been heavily involved in the
lucrative business of drugs.

But clearly any confirmation of an IRA Colombian link would be a major political
embarrassment to the Sinn Fein leadership, which has used the peace process to
cultivate its image of respectability, winning the confidence of leading Irish
American politicians and business people.

"I just wonder what the republican movement's American businessmen backers think
of these guys out in the jungle with a Marxist organisation that draws its
resources from drugs which in turn poison the young people in America . . . I
just wonder what their supporters there are to make of this," said Sir Reg
Empey, the Ulster Unionist acting first minister of the power sharing assembly.

Coincidentally Gerry Adams, the Sinn Fein president, is due to leave for a
lecture tour in Latin America in the next couple of weeks.

Yesterday news agencies were circulating a photograph of Mr Adams, with one of
the suspects at his shoulder.

Details of the suspects began to emerge yesterday. One of the three men survived
a controversial shooting in November l982 when his friend was killed after RUC
officers opened fire at a hayshed in Co Armagh.

Martin McCauley, from Lurgan, Co Armagh - believed to be one of the IRA's top
explosives experts - was wounded in the attack by an RUC anti-terrorist unit.

Mr McCauley later received a five figure sum in compensation after claiming he
was the victim of a "shoot to kill" attack.

James Monaghan from Co Donegal, is known to be a senior member of the republican
movement.

LOAD-DATE: August 14, 2001

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                        Financial Times (London,England)

                            August 14, 2001 Tuesday
                                London Edition 2

US fails to win Russia over on missile defence

BYLINE: By ANDREW JACK

SECTION: WORLD NEWS - EUROPE ; Pg. 5

LENGTH: 418 words

DATELINE: MOSCOW


Russia and the US yesterday stuck to their contradictory positions on the 1972
Anti-Ballistic Missile treaty while attempting to broaden their discussions to
wider defence-related issues.

During top level talks in Moscow with Donald Rumsfeld, the US secretary of
defence, yesterday, senior Russian officials maintained their stance that the
ABM treaty should remain the cornerstone of arms control.

However President Vladimir Putin welcomed continued discussions with the US,
stressing the linkage of defensive and offensive nuclear systems, and calling
for clarifications on lower thresholds for nuclear weapons.

Mr Rumsfeld, on his first visit to Russia since taking up his position, stressed
that the ABM treaty was out-dated, but also argued that his objective during
talks was broader than simply discussing President George W. Bush's planned
National Missile Defence system.

Moscow regards the system as a threat to the ABM treaty. Yesterday Mr Putin
stressed that Moscow considers the ABM treaty as closely linked to the Start 1
and Start 2 arms reduction treaties.

"The ABM treaty inhibits the kind of research and development and testing that
the US is engaged in," Mr Rumsfeld said, adding that it wanted a system which
could defend not only the US but "our friends and allies and deployed forces".

He said that within one or two months the US would be able to indicate how far
it would be willing to cut its nuclear warheads.

The current Start 2 treaty would cut the arsenals of each country by half to
about 3,500 warheads, but Russia has been arguing for deeper cuts still.

Asked if he had been persuaded that the ABM treaty was no longer necessary,
Sergei Ivanov, Russia's minister of defence, said: "I'm afraid not ... The
existing multi-layered system of strategic security . . . fully meets the needs
of Russia."

Mr Rumsfeld reiterated that the US did not consider Russia to be a threat and
argued that international agreements - such as the ABM treaty - were not even
necessary between allied nations with shared values.

However, in a discussion with Russian journalists in the morning, he said the US
continued to believe in the threat of weapons from "rogue states", specifically
citing the case of North Korea. He also mentioned Iran, Iraq and Libya, saying
the US had evidence of the adaptation of ballistic missiles with
intercontinental range by such countries, and of ballistic missiles which had
been armed with nuclear, biological and chemical warheads. Editorial Comment,
Page 14

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                        Financial Times (London,England)

                            August 8, 2001 Wednesday
                                London Edition 1

Separatists in Philippines sign ceasefire

BYLINE: By ROEL LANDINGIN

SECTION: ASIA-PACIFIC ; Pg. 6

LENGTH: 351 words

DATELINE: MANILA


The Philippine government and the Moro Islamic Liberation Front (MILF), the
largest Muslim separatist group, signed a ceasefire agreement yesterday in
Malaysia.

The pact is expected to bring 30 years of Islamic insurgency in the southern
Philippine island of Mindanao closer to an end. The MILF and other rebel groups
have been fighting for an independent state for the Philippines' Muslim
minority, who comprise a quarter of the Christian-dominated island.

"We hope the agreement will translate immediately into peace on the ground,"
said Roilo Golez, national security adviser.

The agreement, signed by representatives of the Philippine government and the
MILF, was later presented to President Gloria Macapagal-Arroyo, who is paying a
three-day visit to Malaysia, and Mahathir Mohammad, Malaysian prime minister.

The signing of the ceasefire accord leaves the Abu Sayyaf extremists as the only
Muslim rebel group fighting the government. The group still holds 21 hostages,
including an American missionary couple, in the southern Philippine island of
Basilan. Another Muslim separatist group, the Moro National Liberation Front,
signed a peace agreement in 1996.

Yesterday's deal, signed after days of negotiations, built on a preliminary
accord agreed in Libya but officials said that further negotiations were
required to reach the final peace agreement.

Observers are hoping the participation of the Libyan and Malaysian governments
will give the peace initiative a better chance of succeeding. A 1997 ceasefire
pact was broken last year when Joseph Estrada, the former Philippine president
who was ousted amid a corruption scandal in January, ordered military offensives
against the Muslim separatists.

This time, a co-ordinating committee to administer the ceasefire has been agreed
and monitoring will be conducted by members of the Organisation of the Islamic
Conference.

Mrs Macapagal, who is visiting Kuala Lumpur for three days, chose Malaysia for
her first official visit overseas since taking power in January to thank Dr
Mahathir for his government's role in assisting the peace talks.

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                        Financial Times (London,England)

                            August 8, 2001 Wednesday
                                London Edition 1

Caribbean aid call to Libya NEWS DIGEST

BYLINE: By CANUTE JAMES

SECTION: MIDDLE EAST & AFRICA ; Pg. 9

LENGTH: 110 words

DATELINE: KINGSTON


Caribbean aid call to Libya

Leaders of five Caribbean countries this week are concluding arrangements for an
official visit to Libya later this month to seek financial assistance, amid
concerns they could be penalised by the US and other countries that have
ostracised the North African country.

The prime ministers of Antigua, Dominica, Grenada, St Kitts-Nevis and St Vincent
say they need assistance for their small, weak economies, and that aid from
traditional sources has been significantly reduced.

The governments say aid for the Caribbean from the US totalled Dollars 120m last
year, just over half of what it was a decade ago. Canute James, Kingston

LOAD-DATE: August 7, 2001

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                        Financial Times (London,England)

                            August 4, 2001 Saturday
                                London Edition 1

Echoes and the Northumbrian magpie men: The year's Womad festival was billed as
a sound clash between fusion and authenticity: David Honigmann is won over by
both sides

BYLINE: By DAVID HONIGMANN

SECTION: ARTS ; Pg. 5

LENGTH: 1058 words


The BBC, asponsor through Radio 3, talked up the Womad Festival in Reading as a
clash between genre-bending fusion and austere authenticity. Fusion started
shakily with a bizarre collaboration. Nuclearte, a new wave band from Sicily,
set Etna-voiced Rossana Filippone against clattering industrial synthesisers.
Behind them, Imbizo, a choir from Bulawayo, were reduced to an incongruous
synchronised jive. Only for one moment, when Nuclearte's keyboards fell silent
and Imbizo wheezed and hissed like antique machinery as Filippone sang, was it
possible to hear the full potential.

The nadir for fusion followed. The Soweto String Quartet, so safe that their CDs
are fixtures on every coffee table in the northern suburbs of Johannesburg, took
on one of the world's most exciting musical forms, South African jive, and
systematically sucked the life out of it. The medley from Paul Simon's Graceland
would have made a Muzak programmer blush.

Refugees from this ended up at a set from Kazufumi "Echo" Kodama, melancholy
trumpet against dub as dry and heavy as a revving motorcycle. Visually, this was
as interesting as a watching a nest of hackers tinker with laptops, but the
waves of sound massaged the audience with noisy serenity.

Late at night on Friday two contrasting groups redeemed the day. "We,"
proclaimed double-bassist Lloyd Brevett, "are the original Skatalites", which
will have come as news to Don Drummond, who died in an asylum in 1969 after
murdering his girlfriend, or to Jackie Mittoo, Tommy McCook and Roland Alphonso,
all also dead. But the elder statesmen of ska retained all their star quality.
"Independent Anniversary Ska" rearranged Lennon and McCartney's "I Should Have
Known Better" into a shuffling, horn-laden celebration, and it was as easy to
hear ska reaching backwards to swing as to hear it pushing forwards into reggae.

Tinariwen are Touareg nomads from the Sahara desert who first met in Colonel
Gadaffi's training camps in Libya. Triple electric guitars may not be
traditional Touareg instruments, but they seemed it. The sound was screwed to a
severe torque, tight repetitive guitar phrases set against precision clapping.
The only brightening came from sharp ululation from the women singers. Clad in
white robes and concealed behind deep purple head-dresses, the band took their
applause with ghostly impassivity. Haunting and intense, it was perfect for a
hot night.

More authenticity came from the Rizwan-Muazzam Qawwali, who performed
cross-legged on a raised platform covered with white cloth, the two eponymous
nephews of Nusrat Fateh Ali Khan flanked by harmonium players gently pumping
their instruments by opening and closing the lids, and a second row exploding in
handclaps. Uncut qawwali can sound unapproachably alien, and the audience duly
clapped a sound-check. But when the group soared full-throttle into "Allah Ho Ya
Rehman", there were few unbelievers left.

Authentically Northumbrian, though skilled musical magpies, Tarras opened
Saturday afternoon facing a crowd larger than they were used to. "How many
people are here?" asked the singer, Ben Murray. "I want to tell me mam."

"Get on with it, it's not pantomime" murmured a woman with a cut-glass accent,
and it seemed that Tarras's earnestness might fall flat. But a passionate "Oakey
Strike Evictions", the energetic stomping jig of "The Russian" and the slow
rockabilly strut of "Ye Mariners", ending with Jon Redfern and Joss Clapp
duelling on guitars, won everyone over. The violinist, Louise Peacock, powered a
series of jigs and reels, ending with a flourish on "Men Should Wear Their Long
Hair Down".

Cuba came in two flavours: the slick, stagnant authenticity of the Afro- Cuban
All Stars and the experimentation of Orlando "Cachaito" Lopez. Standing with a
double-bass, occasionally pattering on its side with his fingers in response to
Miguel Ang Daz, his conga player, Cachaito was the still centre of a storm. This
was Cuba with the sonic explorations of Jamaica; falling into a groove, then
halting, fading, mutating into something stranger. Biggie Morrison's organ riffs
slipped into "Jesu Joy Of Man's Desiring"; Pee Wee Ellis's saxophone swooped
effortlessly up the scales to find itself topped by ethereal vocals from Magic
Malik. The audience held its breath.

Two contrasting highlights on Sunday. The quieter came in a workshop, when
Cheikh Lo, who had played a crowded, busy Saturday night set, gave a workshop on
Senegalese guitar and percussion. "Encore une?" pleaded the moderator, and with
a ripple of guitar, Lo launched into "Ne Le Thiass", with only Samba Diaye's
talking drum singing softly along with him.

The other was the Orchestre National de Barbe s, a collective based in the Paris
quartier that is a Mecca for bargain hunters, pickpockets, record collectors
interested in North Africa, and immigrants from the Maghreb. Youcef Boukella had
welded 10 of the latter into a tight rock 'n' rai band. ONB started lined up at
the front, swaying gently as all 10 sang "Mimouna", then exploded into life,
Antoine Illouz's trumpet flashing against the percussion.

As Mehdi Askeur sang "Zawiya" to the sound of a dulcimer, front man Fatah
Benlala waved his giant hand drum as if panning for gold. By the time they
finished, on "Alaoui", punching hand drums with algebraic precision, notions of
authenticity were beside the point: all their influences had fused into
something richly distinctive.

The threatened thunder never arrived, and for a while it seemed as if this might
be true of the music as well: the Cambridge Folk Festival and another Womad in
Seattle had spread the big names in roots music thin. But the absence of more
than a few guaranteed crowd-pleasers opened up more of the temporary autonomous
zones in which Womad specialises: unexpected spaces that burst briefly into
flower.

Even the Holiday Inn next to the festival grounds was not immune. Rwandan and
Malian road managers tried to keep their bands' drums from intermingling. Over
the breakfast bar, a wiry Japanese dub posse jostled with a random assortment of
brass players. Cheikh Lo noodled dreamily on a grand piano. And upstairs,
Armenian virtuoso Djivan Gasparyan obsessively practiced his duduk, a plaintive
double-reeded apricot wood oboe whose sad song stilled even the saxophone honk
of the swans on the Thames outside.

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                        Financial Times (London,England)

                            August 4, 2001 Saturday
                                London Edition 1

An exhilarating 1,500-mile journey by camel: BOOKSHELF: Michael Thompson-Noel
traces an expedition across some of the most inhospitable terrain in the wake of
a 19th c

BYLINE: By MICHAEL THOMPSON-NOEL

SECTION: TRAVEL ; Pg. 15

LENGTH: 546 words


Books that are worth reading often possess outstanding opening paragraphs - a
category into which Justin Marozzi's excellentSouth From Barbary: Along The
Slave Routes Of The Libyan Sahara (HarperCollins, Pounds 17.99) fits with silky
ease.

This is his first paragraph: "'Help me with this camel,' said Abd al Wahab,
while Ned and I were busily applying Elizabeth Arden Visible Difference Eight
Hour Cream to our faces. Abd al Wahab, our guide, understood camels. They were
part of his world. Moisturiser was not. Hastily we packed it away, put the
finishing touches to the last camel load, and marched off into the desert. We
were under way."

In many ways, South From Barbary is the perfect travel book: an exhilarating
journey - 1,500 miles by camel in the wake of early 19th century British
explorers and campaigners against the slave trade, across some of the most
inhospitable terrain on earth - described with panache in a way that does
justice both to the beauty of the Sahara and to the cause that Marozzi recounts:
the campaign to end "the most gigantic form of wickedness the world ever saw".

It was his father, he says, who took him to Tripoli for the first time, in 1992.
Before they left they visited one of Tripoli's few English-language bookshops,
where the son picked up the book that for the first time thrust the Sahara at
him in all its guises: silence, loneliness, glorious skies, plains of sand and
rock, loyalty, adventure, treachery, betrayal.

The book was an account of the 1818-20 expedition into the Libyan Sahara led by
Joseph Ritchie, who had been given the task of charting the River Niger. Ritchie
came to a sticky end but, reading his adventures, Marozzi "felt the pull of the
desert and started to dream of a similar journey by camel".

It takes a talented journalist to get modern-day Libya just right, and Marozzi
has all the qualities: observant, shrewd, patient and exceedingly well attuned
to the wackiness and eccentricity that lurk just beneath the surface of a state
presided over by Colonel Gadaffi.

Early on, for example, amid the deathlike stillness of Ghadames, one of the most
evocative oases in the Sahara, a guide tells Marozzi that Ghadames is 2,000
years old, or 5,000 or 12,000. "I have been on government tourist course," says
the man. "This is what they told us to tell the tourists: 2,000, 5,000 or 12,000
years (old)."

Estimates, says Marozzi, suggest that about 2m black slaves were exported to
North Africa and the Middle East during the 19th century, of which 1m came from
the Upper Nile and Ethiopia and 350,000 or so from East Africa. The remaining
650,000 were hauled across the Sahara from Sudan. These figures are dwarfed, he
says, by the number of slaves exported to the US from West Africa during that
period.

It is a measure of Marozzi's skill that he handles the big themes of history and
the small irritations of third-millennium camel-travel - waiting for his tea,
doing the washing-up, bickering with Ned, his travelling companion - with equal
charm and felicity.

Another good book of sand and strife is Jeremy Keenan's Sahara Man (John Murray,
Pounds 18.99), in which Keenan, an authority on the Berbers of the central
Sahara, goes in search of the Tuareg nomads of southern Algeria with whom he
lived.

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                        Financial Times (London,England)

                            August 1, 2001 Wednesday
                                London Edition 1

Ruhrgas dominance in Germany faces challenge ENERGY ENI AND EnbW MOVE IN:

BYLINE: By THOMAS FROMM and OLAF PREUSS

SECTION: COMPANIES & FINANCE EUROPE ; Pg. 26

LENGTH: 353 words


Eni, the partly state-owned Italian oil and gas group, and Energie
Baden-Wurttemberg (EnbW), Germany's third-biggest electricity supplier, are set
to challenge Ruhrgas's dominance of the German gas market.

Eni and EnBW have agreed to take a majority stake in Gasversorgung
Suddeutschland (GVS), a regional gas supplier in southern Germany.

It is believed that Eni plans to supply gas from Algeria and Libya to the German
market through GVS, which gets most of its supplies from Ruhrgas.

The move would also expand the interests of Electricite de France, the
state-owned utility, in Germany through its 34.5 per cent stake in EnBW. EnBW
has only a small gas business in Germany, thereby challenging Ruhrgas, so far
the dominating player on the German gas market.

Eni and EnBW have agreed to buy 25 per cent of GVS shares from the
Baden-Wurttemberg government and 33.4 per cent from Neckarwerke Stuttgart. They
plan to set up a holding company to administer the resulting majority holding of
58.3 per cent.

There are, however, two potential obstacles to the deal. Firstly, MVV Energie, a
rival of EnBW owns 26.25 per cent of GVS and has pre-emption over the other
shares.

"If somebody wants to change the share ownership, they have to talk to us first.
This has not happened so far," said MVV Energie.

Another hurdle could be regional politics. Erwin Teufel, Baden-Wurttemberg's
conservative prime minster, has said he is happy with EnBW and Eni taking over
the majority of GVS, but his economics minister, Walter Doering from the liberal
FDP, has demanded an open auction.

So far, GVS receives 85 per cent of its gas supplies from Ruhrgas and 15 per
cent from Wingas, a subsidiary from BASF and Gazprom, the Russian energy giant.
Supply contracts with both companies run until 2015.

It is assumed that, after acquiring the majority of GVS, Eni and EnBW will
challenge these contracts legally in order to pave the way for Algerian and
Lybian gas produced by ENI's subsidiary Agip.

Similar contracts were overturned in the courts after the German electricity
market was liberalised to promote competition. www.ft.com/

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                        Financial Times (London,England)

                             July 31, 2001 Tuesday
                                London Edition 1

French bank gives Iran credits worth up to Dollars 1bn

BYLINE: By VICTOR MALLET

SECTION: MIDDLE-EAST & THE AMERICAS ; Pg. 12

LENGTH: 491 words

DATELINE: PARIS


Credit Agricole Indosuez (CAI), part of France's largest bank, yesterday became
the latest French company to deepen its involvement in Iran as European
investors continue to benefit from US antipathy to the Islamic government in
Tehran.

CAI said it had signed a framework agreement with Iran's five largest
state-owned banks to provide multi-source buyer credits - facilities for buyers
of exports from various European countries - worth up to Dollars 1bn (Pounds
702m).

The previous CAI limit was Dollars 700m.

The agreement is guaranteed by the Iranian Ministry of the Economy and Finance
and by European export credit agencies.

SG, the investment banking arm of Societe Generale, another French bank,
announced a similar deal last week, also for Dollars 1bn, with Bank Mellat, Bank
Melli, Bank Saderat, Bank Sepah and Bank Tejarat.

The French banks are helping to finance European exports of equipment,
especially for the oil, gas and petrochemical industries, but also for industry
and infrastructure development.

"The interest of European companies is rising," Michel Perrin, the CAI
international finance executive responsible for Iran and Turkey, said yesterday.

"The financial situation of Iran today is exceptionally good. Oil receipts are
rising and they are managing the economy better."

Among the Iranian contracts cited by CAI are those for Alstom, the French
transport company that is selling 100 locomotives; Technip, the oil and
petrochemical services group; and Nokia, the telecommunications equipment maker.

Last week, the US Congress overwhelmingly voted to extend legislation that
provides for sanctions against non-US companies that make big petroleum industry
investments in Iran or Libya, on the grounds that the two countries have
supported international terrorism.

President George W. Bush is expected to sign it in spite of his administration's
belief that such unilateral measures are ineffective and inflexible, and can
damage the interests of US corporations.

US oil companies are barred from Iran and are watching with growing irritation
as their international competitors pile into the market.

Under the Iran-Libya Sanctions Act, the US president is allowed to punish
foreign companies that invest more than Dollars 20m in oil or gas development in
either country. But no company has actually been penalised since it came into
effect five years ago.

In 1998, the Clinton administration even granted a special waiver to a Dollars
2bn oil investment by a consortium that included Total of France, now
TotalFinaElf, in order to avert a row with Europe.

Eni, the Italian energy group, is the latest European company to risk falling
foul of the US law.

US officials say they have mentioned their concerns to Eni and the Italian
government, but it is not clear if anything will be done.

As one French investor with interests in Iran said yesterday: "In the end, I
think that the US authorities have turned a blind eye."

LOAD-DATE: July 31, 2001

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                        Financial Times (London,England)

                              July 27, 2001 Friday
                                London Edition 1

US to extend sanctions on Libya and Iran

BYLINE: By EDWARD ALDEN

SECTION: THE AMERICAS, AFRICA & MIDDLE EAST ; Pg. 8

LENGTH: 306 words

DATELINE: WASHINGTON


The US is poised to extend for another five years a controversial sanctions law
designed to prevent foreign companies from investing in Iran and Libya.

The House of Representatives yesterday followed the Senate in voting
overwhelmingly to extend the Iran-Libya Sanctions Act, which expires next month.

Under the act, the US can punish foreign companies that invest more than Dollars
20m in oil or gas development in either country.

The decision is a big setback for the Bush administration, which launched a
review of US sanctions policies as one of its first initiatives after taking
office. Administration officials have argued that US sanctions are too often
ineffective and needlessly hurt US companies, but the administration was unable
to mount any effective effort to persuade Congress.

While the law has been in place since 1996, the US has waived the sanctions in
the single case where it determined that foreign oil companies were defying the
investment ban.

The House version, which passed by a 409-6 vote, offered a small concession to
the administration by agreeing to allow a review of the law after two years. If
the administration determines that it has been ineffective, it may issue a
report to Congress and Congress may consider lifting the law at that time. The
administration had favoured a two-year extension of the bill rather than five
years.

The Senate bill, which passed on a 96-2 vote late on Wednesday, provides for no
such review, but the House version is expected to be the final one approved.

Iran's government yesterday denounced the US decision, saying the measures
contradicted international norms and trade relations, according to the official
Iranian news agency.

"The use of sanctions as a foreign policy tool is outdated and futile," Tehran
said. For regional reports, www.ft.com/mideastafrica

LOAD-DATE: July 26, 2001

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                        Financial Times (London,England)

                             July 26, 2001 Thursday
                                London Edition 2

Bush cool on trying to improve relations with Iran: US oil groups are unhappy at
the White House's lack of effort in resuming ties, write Carola Hoyos andGuy
Dinmore

BYLINE: By GUY DINMORE and CAROLA HOYOS

SECTION: ASIA-PACIFIC, MIDDLE EAST & AFRICA ; Pg. 10

LENGTH: 792 words


When Mohammad Khatami came to the United Nations last September, Madeleine
Albright was so keen to shake the Iranian president's hand that it took a rather
athletic lunge by a more cautious diplomat to keep the then US secretary of
state from taking things too far.

Observers expected President George W. Bush to be even more enthusiastic than
his predecessors about improving relations with Iran. But the new administration
is putting little energy into overturning Washington's controversial ban on
economic relations with the country as the August 5 deadline approaches for
Congress to renew the sanctions.

"US companies with an interest in Iran, in particular the energy companies, feel
the administration has missed an opportunity to send a positive message to the
Iranian government for improving commercial relations. They are not pleased with
this administration," says John Radsan, director of the Eurasia Group, which
advocates closer Iranian/US business ties.

Oil executives from companies such as Conoco and Chevron had high hopes that the
energy sector background of Mr Bush and Vice-President Dick Cheney would prompt
a resumption of US business ties with Iran, which has the world's fifth largest
proven oil reserves. Mr Cheney was an especially vocal opponent of sanctions
against Iran during the five years he headed Halliburton, an oil services
company.

But in their new role, two factors in particular have limited their willingness
to soften their stance on Iran: Russia and Israel. After Mr Khatami's visit to
Moscow in March, Russia said it would sell billions of dollars worth of weapons
to Iran and again rejected US demands that it cancel the Dollars 800m contract
to finish the nuclear power plant at Bushehr.

In Israel, the change in government has made US rapprochement with Iran much
more difficult, analysts say.

Washington is not receiving much help from Iran either. Reformists grouped
around Mr Khatami are in too weak a position to overcome objections from
hardline clerics and take the initiative in relations with the US.

The furthest they can go has been expressed by Kamal Kharrazi, the country's
foreign minister, who has said Iran would reciprocate any change in US policy
but would not take the first step.

Diplomats in Tehran say Mr Khatami has neither the authority, nor possibly even
the inclination, to address Washington's prime concerns: Iran's support for
Palestinian groups opposed to the existence of Israel and its own weapons
programme.

In such a climate, Congress is unlikely to make any drastic changes to the Iran
Libya Sanctions Act (Ilsa) which is designed to curb foreign investment in the
oil and gas sectors of both countries. The act allows the president to impose
penalties on any foreign company that invests more than Dollars 20m in the
energy industry of either country.

The House and Senate are considering three possibilities - a two-year extension,
a five-year extension and a five-year extension with an 18-month review period.

The White House supports a two-year extension but its lobbying efforts have
hardly been felt on Capitol Hill. More palpable has been the pressure from the
American Israeli Public Affairs Committee, the Jewish lobbying group, which is
pushing for a five-year extension.

Even if Congress renews Ilsa for five years, analysts say it would not hinder
the White House's ability to change the executive orders imposed by President
Bill Clinton in 1995 that bar virtually all business with Iran.

Despite promising a policy review on Iran by June and openly questioning the
effectiveness of sanctions in general, the Bush administration has put missile
defence and domestic oil exploration ahead of Iran.

"They have taken no steps that might in any way undercut their objectives. They
have to justify National Missile Defence with the Iran threat and they are
focusing on US (oil) production and don't want to undercut that domestic push,"
says Gary Sick, director of Columbia University's Middle East Centre.

By signing agreements with Italian and Japanese oil companies in recent weeks -
and with further deals with Spanish and Australian oil concerns expected soon -
Tehran has demonstrated that the sanctions threat by Ilsa against non-US
companies carry little weight.

Meanwhile, Europe's cautious dialogue with Iran on issues such as weapons of
mass destruction and human rights has also left the US isolated politically.

But improving ties with Iran is not straight forward. If Washington supports Mr
Khatami too openly, it risks damaging the reform movement by association.

But taking the opposite approach plays into the hands of hardliners, who are
happy to maintain the status quo. For regional reports, www.ft.com/mideastafrica
www.ft.com/americas

LOAD-DATE: July 25, 2001

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                        Financial Times (London,England)

                             July 24, 2001 Tuesday
                                London Edition 1

Energy plan dims

SECTION: LEADER ; Pg. 18

LENGTH: 423 words


President George W. Bush's energy plan already looks as if it will run into the
tar sands of Capitol Hill. This is partly because falling energy prices have
lessened the US's sense of an energy crisis. But it is also because the plan is
widely seen to be flawed by its over-emphasis on production rather than
conservation. This is costing Mr Bush vital support among Republican moderates.

Oil prices have now fallen to the point that the Opec cartel is considering a
further cut in output. US production of oil and natural gas has inched up in
response to recent high prices. And far from the lights still going out in
California, the state has this month been selling excess power that it had
bought in a panic. The golden state is still suffering from a fundamental energy
imbalance but it has benefited from a coolish summer so far.

In the absence of a crisis, Congress is dismembering the Bush energy package,
giving the oil industry more in tax exemptions than was proposed but less in
other ways. The oil lobby has run up against those congressmen who take a
tougher line than the administration on renewing US sanctions on investment in
oil-producing Iran and Libya. The administration has clashed with senior
citizens and others in Florida, including Jeb Bush, the governor and brother of
the president, who want to restrict drilling in the eastern Gulf of Mexico. And
farmers, who want ethanol to continue to be used in Midwest petrol, are opposing
the proposal to set uniform national fuel standards.

If the administration is to lift the debate above these special interest
wrangles and to tackle the bigger issues of creating a proper national power
grid and streamlining the planning process for nuclear plants, it needs also to
appeal much more to environmental interests.

It has two opportunities to do this. First it must be more determined to tighten
so-called CAFE fuel efficiency standards on new vehicles. Not only have these
CAFE standards changed little since their introduction in 1975 but they also
allow lower mileage per gallon for light trucks, which now include the
increasingly popular sports and utility vehicles.

Second, the administration must press ahead with the climate change proposals
that it has promised as its alternative to the Kyoto treaty. Such proposals may
not appear credible to the rest of the world, which yesterday endorsed a
modified Kyoto protocol. But they might at least convince the US public that the
administration's energy plans include a serious attempt to promote conservation.

LOAD-DATE: July 23, 2001

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                        Financial Times (London,England)

                             July 21, 2001 Saturday
                                London Edition 1

Zambia's deadly virus Beset by poverty and debt, Zambia is not even spending the
cash the international community has given it to combat the scourge of HIV. Alan
Beattie explains

BYLINE: By ALAN BEATTIE

SECTION: FRONT PAGE - WEEKEND FT ; Pg. 1

LENGTH: 1898 words






This weekend's Group of Eight meeting in Genoa is a foregone conclusion, since
the communique was written weeks ago.

Barring an extraordinary upheaval, it will offer no more debt relief to the
world's poorest countries. There will be warm words on development aid;
governments may again announce contributions to a rather small global HIV fund,
and there will be familiar rhetoric about forcing pharmaceuticals companies to
cut the price of drugs for the world's poor.

Such inaction will be felt thousands of miles away, in countries such as Zambia
beset by three great burdens: debt, poverty and Aids.

Protesters will say the G8 have betrayed countries such as Zambia. But whatever
the shortcomings of the international community, Zambia's government is not even
spending the money it has been given.

Zambia has struggled ever since it gained independence in the 1960s with an
underdeveloped economy, a legacy of colonial rule. Desperately poor and in hock
to the International Monetary Fund, the World Bank and rich countries by about
Dollars 6bn twice its annual national income Zambia spends a quarter of its
government budget on debt repayments. A fifth of its population is believed to
have HIV. Debt relief will give it an extra Dollars 100m to spend this year,
about 10 per cent of its government budget, half of which is already overseas
aid.

Aid campaigners say this is not enough. But at present, the near-paralysis of
Zambia's government is rendering outside help almost futile.

Evidence of this abounds in Zambia's mining "copperbelt" witness the string of
sprawling settlements scarred with waste heaps and vast open-cast pits. Half the
country's exports are copper, though dreadful mismanagement forced the
state-owned mining company to sell up to foreigners, including the South African
giant Anglo-American, at a knockdown price and with generous tax concessions.

Kitwe, the centre of the copperbelt, is a company town of tidy houses and lawns
surrounded by vast mud-built shanty settlements.

If you had to design an environment where desperate poverty and poor education
conspire to spread HIV, it would look a lot like this. The transient population
(the town is on the trucking route to central Africa), the high pay for miners,
and the thousands of rural Zambians lured in by mining money is a dangerous mix.
Bars frequented by miners are murky but busy especially around pay day at the
end of the month and attract a constant stream of local women selling
themselves.

Peter Sinkamba, a former mining engineer who now runs an environmental campaign
in the copperbelt, says: "There is a problem of culture. Extramarital affairs
are not a big deal."

He adds: "Parents cannot afford the basics for their children so they are
unleashed on to the streets. Where sex becomes a source of family income, you
are going to get Aids."

Sinkamba took me to the Carwash, a rudimentary club set up in a car park by
Kitwe's market, where hover gangs of distressingly young and beautiful women
"small girls" in the local usage, some as young as 13. One tells me she charges
20,000 kwacha (Dollars 5) a time, or 40,000 kwacha for all night. She doesn't
mention condoms, though locals say they are not considered macho by many men,
and prostitutes can charge more for sex without.

Attempts to combat Aids are few and scattered, with government initiatives
largely absent. "No one works together here," says a nurse in a local clinic.
Shortages of drugs mean patients often have to buy their prescribed medicine
privately, or go without.

A drop-in centre, supported by the local Roman Catholic diocese, offers condoms
and counselling; it is testament to the government's feebleness that Catholicism
out-does it in promoting condoms.

Teams of home visitors organised by local churches take food and palliative
drugs to HJV sufferers in their houses, though some quixotically preach
abstinence as the best solution, solemnly assuring me that "condoms cause
prostitution".

No one even knows how many are infected. Aids is never recorded as a cause of
death - only opportunistic infections that deal the killer blow, such as
tuberculosis or malaria. Tim Wadeson the chief executive of Konkola Copper
Mines, Anglo's subsidiary in the copper-belt town of Chingola, seems relieved
that a voluntary workforce screening programme showed only 18 per cent infected.

As for treatment, hardly anyone thinks large-scale Aids drug treatment - the
antiretrovirals about which G8 leaders like to talk - was realistic. "We have
laboratories and doctors in place," says a doctor at KCM. But even after the
high-profile international campaign to reduce the cost of Aids drugs from tens
of thousands of dollars a year to Dollars 1,000 or less, it is still
prohibitive.

Wadeson says: Clearly we can't afford that. At the moment, you could say we
can't afford anything, since the mine is losing money.

Ironically, Zambia spotted the appalling potential of HIV early. The son of
Kenneth Kaunda, the former president, died after contracting Aids in the 1980s.
By 1986, Catholic and Anglican churches came together to tackle the disease.
(Zambia has had a strong Catholic following since 19th century Jesuit
missionaries sheltered locals from slave traders.)

But weak government and a lack of money have hampered progress since then.

For many, it is already too late. Jon Hospice, on the outskirts of the capital
Lusaka, is a neat one-storey building in a bare compound amid a dusty
breeze-block housing settlement, built by a Dutch benefactor.

It provides painkillers and care for patients nearing death. John, a gentle and
frail former motor mechanic from nearby, who has a badly infected leg and has
suffered from malaria, was this week told he is HIV positive. "There is nothing
I can feel, since it has already happened and I have to live with it," he says.
His wife died last October and their daughter is being brought up by her
grandmother. John says poverty spreads the virus.

"Industry is dying, and there are no jobs except working for the government," he
says.

In the women's ward, emaciated bundles of humanity huddle silently under
hospital blankets. Gertrude, the hospice co-ordinator, comforts one patient who
has woken up in a fright. "She had a nightmare that she was dying," she says.

The clinic, supported by private donations, is clean and airy, but holds no more
than 30 patients and is one of only two or three in Lusaka. Civil servants wear
red Aids ribbons, but the National Aids Council set up to co-ordinate a response
has just one senior appointee so far.

Western donors have been slow to help the government until they see a convincing
programme in place: Laurence Clarke, the World Bank's representative in Lusaka,
says a donor round-table meeting last year failed to fill a Dollars 200m funding
gap.

John seems unlikely to live more than a few weeks, but his analysis is
perceptive. Poverty and ignorance are the real killers in Zambia. But in an
economy that contracted by 1 per cent each year in the 1990s, and with the
education system chronically short of funds, there are few ways out.

Many do not even make it to school. Gertrude Sikota, the head of Luano Basic
School in Kapisha, a settlement on the copperbelt, has the air of cheerful
autocracy favoured by successful primary school heads the world over. But her
school is short of money.

She has tried the government's foreign donor-supported basic education programme
but got nowhere: the money, she says, does not seem to make it out of Lusaka.
The school has a new block, funded by the British aid agency Oxfam, but can
still only admit half its applicants.

Formerly, the school charged fees of 10,000 kwacha a term as part of government
policy. "Last year, fees were officially abolished," Sikota says. "But we still
charge 10,000 kwacha a term, because the government grant was only enough to buy
some sports and domestic science equipment." Villages increasingly set up their
own "community schools" to compensate for government failure.

Clarke says: "There appears to be a deliberate attempt to rein in expenditure."
Spending on health and education are 30 per cent behind schedule. An archaic
cash budget system forces departments on monthly begging trips to the finance
ministry. In the words of another western donor, "the government lives
hand-to-mouth".

This day-to-day twitchiness is a national trait, symbolised by Lusaka's
taxi-drivers. Frightened that their bosses will accuse them of profligacy by
ending the day with a full tank of petrol, they fill up with minuscule amounts
each time. No taxi ride lasts more than five minutes without a muttered apology
and a swing into a garage.

But there is more to the government's deadly caution than national habit.
Political instability is threatening the western aid that makes up half of the
Zambian government's budget and supplements it with direct spending elsewhere.

Frederick Chiluba, the president, has alarmed the international community with a
bid to change the constitution to allow himself a third term in office.

Tension is rising. Two weeks ago Paul Tembo, a former member of Chiluba's
political party, was shot dead six hours before he was due to testify at a
corruption inquiry.

Heavily dependent on international donors, ministers seem terrified that their
president's actions will cut off external funding.

Zambia's main bilateral donors, including the US, the UK and Denmark, are
monitoring developments week by week, with some ready to pull out if the
situation worsens. As for the debt relief money - carefully audited and
ring-fenced for social spending - one authoritative estimate has it that only
Dollars 1.6m of the Dollars 100m for this year has been spent.

It is almost impossible to wring any comment from the government on the matter.
Last week the finance ministry blocked all my requests for meetings with a
clearly practised display of bureaucratic buck-passing and spurious appeals to
protocol.

It isn't hard, however, to find depressing examples of warped priorities. Last
week's Organisation of African Unity summit was held in Lusaka. The Zambians
budgeted 0.5 per cent of annual national income for the meeting; it was used to
resurface roads and buy a new Mercedes for delegates - a far cry from the needs
of Aids patients.

The "millennium village", a field full of jerry-built whitewashed houses with
green mirrored glass, supposed to have been finished for the summit, lay
half-completed though local rumours have it that Libya's Colonel Gadaffi has
stepped in to buy them up.

Nearby, the concrete piles for another presidential vanity project, an
"Institute of Democratic and Industrial Relations Studies", rise out of the
baked earth.

Even money that is spent has difficulty reaching the poor. A third of government
spending is earmarked for health and education, but Laurence Clarke says the
preliminary results of a joint government/World Bank study suggests that much
does not get to the front line.

No one looks good in the mess that is Zambia. Aid flows to the country are
inadequate; debt relief is minimal; western government donors appear fragmented;
drugs prices will have to come down much further to help Aids sufferers.

In a country run better than Zambia is, the G8's failings would be shown in more
stark terms. But for Zambia, they are dwarfed by the failures of Chiluba's
jittery, unstable government.

LOAD-DATE: July 23, 2001

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                        Financial Times (London,England)

                             July 19, 2001 Thursday
                                London Edition 1

Blair sticks to support of Bush defence plan US PRESIDENTIAL VISIT DOWNING
STREET IGNORES MPs' PROTESTS BUT HAS RESERVATIONS ON KYOTO ACCORD:

BYLINE: By BEN HUNT and ANDREW PARKER

SECTION: NATIONAL NEWS ; Pg. 4

LENGTH: 443 words

DATELINE: LONDON and BELFAST


Tony Blair ignored oppos-ition from Labour MPs yesterday and reiterated his
sympathetic view of controversial US plans for missile defences against rogue
nuclear states.

Before George W. Bush flew into Britain last night for his first visit as US
president, the prime minister's spokesman said defensive and offensive systems
were needed to deal with weapons of mass destruction.

"The top priority for the prime minister and the president is for the UK and the
US to carry on their very close co-operation to ensure stability in the world,"
said the spokesman. "The only gainers if that relationship is weakened are the
bad guys."

Mr Bush fuelled concern among Labour MPs yesterday by saying he wanted to get
rid of the anti-ballistic missile treaty that has been the cornerstone of arms
control between the US and Russia over the past 30 years.

Mr Blair's spokesman said the prime minister shared the White House's view that
with the end of the cold war, there was now a new threat based on the spread of
missile technology and weapons of mass destruction. He said Mr Blair had paid
close attention to analysis by the intelligence agencies of the threat. It is
believed to focus on states such as North Korea, Iraq and Libya.

The US may need to upgrade radar stations in the north of England as part of its
missile defences. The spokesman said Britain could not set out a precise
position on the US plans until Mr Bush provided detailed proposals.

However, Mr Blair's spokesman admitted there was disagreement over Mr Bush's
decision to repudiate the Kyoto Protocol, which seeks to tackle global warming.
"I am sure the prime minister will underline once again to President Bush that
for the European Union this is a serious issue of substance," he said. "We
remain committed to the Kyoto Protocol."

Mr Bush will spend this morning at the Cabinet Office war rooms, where he can
find out more about his hero Winston Churchill, and at the British Museum.

He will have lunch with the Queen at Buckingham Palace, and then go for talks at
Chequers, the prime minister's country residence.

Mr Bush and Mr Blair will review progress on US and EU efforts to halt the slide
to civil war in Macedonia.

Mr Blair will also update Mr Bush on the stalled Northern Ireland peace process.
Mr Bush yesterday called on the IRA to start handing over its weapons as a
central part of the Good Friday peace accord.

Whitehall officials are encouraged by Mr Bush's interest in the peace process.
Ulster politicians also welcomed his intervention. An Ulster Unionist official
said: "We would never have received such unequivocal support (for
decommissioning) from Bill Clinton."

LOAD-DATE: July 18, 2001

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                        Financial Times (London,England)

                             July 14, 2001 Saturday
                                London Edition 1

Are the oil giants out of their depth? In the shallow waters of the northern
Caspian Sea, they face one of their biggest challenges - how to extract what
could be a vast reserve without causing an environmental or political storm.
David Buchan reports

BYLINE: By DAVID BUCHAN

SECTION: FRONT PAGE - WEEKEND FT ; Pg. 1

LENGTH: 2072 words






From afar, across the light blue waters of the north Caspian, it looks like an
island church in the Venetian lagoon. Closer up, the duomo turns out to be a
drilling tower, the basilica an enormous platform, and together they are a
remarkable tribute to what people will do to get oil.

The Sunkar rig (Kazakh for eagle) started life as a Nigerian swamp barge. It was
towed through the Mediterranean, across the Black Sea, up the Don, down the
Volga, to Astrakhan where Russian welders added side pontoons that tripled its
width to the dimension of a football field.

It now sits 50km out in the waters of Kazakhstan in all of 4 metres of water,
resting on a slightly built-up "berm", and at several times its original weight
of 7,400 tonnes with all the drilling equipment needed to map out the dimensions
of the Kashagan oilfield.

No one in their right mind would go to such lengths to mount such an invasion of
the shallows of the north Caspian, if Kashagan were not considered the largest
potential oil reserve found in the world in the past two decades.

In one sense, Kashagan is a godsend. Discoveries in established oil provinces
have declined in size. So, to sustain the world's ever-growing appetite for oil,
the industry is pushing the limits of technology and geography to prospect in
places such as the deep water off west Africa.

Politicians, too, are taking more chances. President George W. Bush is risking
the wrath of the US environmental lobby by proposing to open up part of Alaska's
hitherto sacrosanct wildlife refuge to drilling. At best, it probably holds only
half Kashagan's reserves.

Kashagan could be vast. Sunkar has drilled two exploratory wells 40km apart, and
found oil in each. The supposition that the two wells form part of the same
oil-bearing structure has led some analysts to guess it could hold 4Obn barrels,
though only part of that will be recoverable.

To pursue this potential prize, nine oil companies, including the majors
ExxonMobil, Shell, TotalFinaElf and Agip, the exploration wing of Italy's Eni
took the unusual step of putting all their concessions together and forming the
Offshore Kazakhstan International Oil Consortium (Okioc) to exploit Kashagan.

But the challenges are enormous. "I think it would almost have been a relief for
many of us if we hadn't found oil," says a senior executive of one of the
companies involved.

While the environment is a challenge to Okioc, whose rigs also have to contend
with wind-driven ice piles in winter, Okioc also poses a serious challenge to
the environment. Drilling in the north Caspian poses greater potential
ecological risks than, for instance, anything Bush has proposed for Alaska.

The Caspian has no scouring tide to clean it, and its northern part has no depth
to disperse oil spills. This giant paddling pool (the north Caspian's average
depth is 3.3 metres) is home to the unique Caspian seal, and to 80 per cent of
the world's caviar - the deltas of the Volga and Ural rivers which flow into the
north Caspian are the sturgeon's main breeding grounds.

"No financial payment can compensate for damage done to the environment," says
Serikbek Daukeyev, the akim (governor) of the Atyrau region, into which Kashagan
falls.

But this former environment minister in the central Kazakh government makes it
clear he will pursue any claims against Okioc, stressing that "the risks should
be insured".

They are. Quite apart from the liability precautions of its individual member
companies, Okioc itself has taken out a Dollars 500m insurance policy - a record
for a single field. So far it has only paid a tiny fine (Dollars 300) for a tiny
spill (200 litres) from Sunkar.

But the risks will grow. When BP recently decided to sell its 9 per cent share
in Kashagan, it said the reason was that it would never have had the same
influence as other majors with 14 per cent each. But environmental worries and
liabilities are also said to have been behind BP's retreat.

If the Kazakhs are watching Okioc like a hawk, Agip, Kashagan's new operator, is
under equal scrutiny from its partners. The Italian company was voted into the
operatorship in a classic round of oil industry machinations that ended in a
Heathrow airport hotel in February.

The Italians' victory came after their bigger brethren cancelled each other out.
Shell, by its own admission, made itself unpopular for the early delays and cost
overruns in the construction of Sunkar for which it was responsible.

ExxonMobil's partners thought having a US company in charge might foreclose the
possibility of eventually shipping Kashagan oil through Iran.

TotalFinaElf tried to buy its way into the operator's chair by offering Dollars
600m for the Kashagan shares of BP and Statoil of Norway. But it was blocked by
ExxonMobil and Shell which TotalFinaElf executives surmise - wanted to prevent
the newly merged TotalFina and Elf from cementing their progress.

"So the Italians won because they were the least objectionable," says one
executive of another company.

But Kashagan is years from full development, and Agip may find its partners -
Exxon is mentioned - only too willing to take over if the Italians slip up.

It is not the Italian way to play hard ball. So far, the main sign of the new
regime is the appearance of espresso coffee machines in Atyrau, the operational
headquarters of Okioc, and the careworn admission by Andrea Chiura, Okioc's
on-the-spot manager, that he will have to spend even more time in Atyrau and
less in his native Bologna.

Agip is keeping the management headquarters in The Hague (placed there when
Shell played the main part in Kashagan's start-up). "We will share core
positions with our partners," Chiura says. We have no intention of filling 100
per cent ourselves."

But the 51-year-old Italian acknowledges that Kashagan is the biggest challenge
of a career that has taken him to Libya, Norway, Tunisia and Azerbaijan.

And Agip is fielding others from its A-team. Last month, for A instance, it
brought in a new seismic team led by Davide Calcagni, who after recent service
in Aberdeen has been tracking Kashagan from Milan.

Agip, he says, has kept a full capacity in the acquisition of seismic data which
some other companies farm out, as well as seismic data interpretation, which all
the companies still do. Other new arrivals are being brought in from China, and
from Nigeria via Milan.

At the Okioc hotel, they drink water, and after dinner head back to the
computers to continue reading the seismic runes - in contrast to their northern
European counterparts' penchant to sink a few after-work beers. They almost seem
to want, in the face of a certain scepticism from their partners, to remind
everyone that just as the Romans once supervised works across the known world,
so they can do so again in the unknowns of Kashagan.

The biggest unknown is the water level. "The real curse of the Caspian is its
variability," says Gerry, an Okioc engineer.

The Caspian's general level has, for reasons essentially unknown but perhaps
relating to tectonic plate movement, fluctuated. It gradually declined from 1940
to the late 1970s, then rose quite sharply until the mid-1990s, only to subside
since.

But the wind, sweeping down from Russia or across the Kazakh steppes, cars cause
far more rapid fluctuations. "Ifs like blowing across a saucer of water,"
explains an Okioc employee.

One day last month, for instance, the level around the Sunkar dropped by 1
metre, or 25 per cent, forcing tugs and supply boats to manoeuvre to avoid
running aground.

With a shallow gradient of 10,000:1 a change of 1 metre for every 10km these
surges and retreats can temporarily move parts of the coastline up to 30km
inland or up to 10km offshore.

The surges can turn nasty in winter. They produce ice floes, piled up on each
other by the wind against any solid form such as a rig. To guard against this,
the Astrakhan welders put high steel sides on the Sunkar. Okioc is also
experimenting with pylons and rock piles to provide ice-breaks away from the
rig.

The consortium has turned to Arctic solutions for escape vehicles. It has bought
Canadian-made Arktos rescue vehicles. Each resembles two first world war tanks
yoked together so that one helps the other to clamber in and off ice and water.
So far they have not been used, and may never be.

But in regular use - in this technophile's paradise - are two Finnish-built,
Dutch-operated, ice-breaking supply ships. Faced with thick ice, ice-breakers
usually rely on driving themselves up on to the ice, and using their weight to
break it. In the shallow north Caspian this would simply drive the boat into the
seabed.

So the Wagenborg boats - named, predictably, Arcticaborg and Antarcticaborg -
have propellers that can swivel through 360 degrees. If the boats hit trouble,
they turn round and go in backwards, chewing up the ice with their propellers.

As if Kashagan did not have hazards enough, its oil - in common with onshore
Kazakh oil - comes with a high degree of hydrogen sulphide, H2S, a poisonous
gas. To guard against a release of this gas, the 80 workers on the Sunkar all
have emergency oxygen masks and canisters to hand.

Eventually, says Ron Steinbring, the Sunkar's beefy Dutch drilling supervisor,
the H2S gas can be injected into spare wells - but only when there are some
depleted wells.

In the same way, it may be possible to dump the cores, or "cuttings", of earth
from new wells into old wells. But for now they are laboriously transported back
to the Kashagan logistics base at Bautino and buried in clay-lined pits.

While these problems may ease as the scale of work increases, a different set of
issues arises, and troubles Galina Chernova. She is a former employee of the
state ecology department in Atyrau, and now runs that rare thing in Kazakhstan,
a non-governmental organisation called the Centre for Ecological Legal
Initiatives.

She wants to stop Kashagan, or at least reduce its scale and impact. "The waters
are just too shallow for an oil-field," she says. "The regional and state
inspectors (of Kazakhstan) are not equipped to control emissions even from
Okioc's present operations." She understands that Kashagan could end up with as
many as 82 wells.

Okioc does not dispute the possibility that if it proves successful, Kashagan
might eventually have 82 wells. "It could be more," says Graham Johnson, Okioc's
environmental supervisor, who points out that a typical North Sea platform would
drill 30-40 wells.

But he rejects any notion that Okioc is lightly regulated: "We are already
controlled to the nth degree by the Kazakh authorities. For instance, treated
sewage dumped into the by sea from the Sunkar is measured against 16 parameters
three times a week, while in the North Sea it would be measured against three
parameters once every three months. If the country isn't careful, it will weigh
people down with minutiae and miss the bigger picture."

The bigger picture is coming into view. Okioc has already decided its second rig
will be on land, on an artificial island being built with 200,000 tonnes of rock
brought from Bautino.

How many such islands will there be? Neither Andrea Chiura nor Graham Johnson
will, or can, say. But the latter points out that "there are plenty of islands
in the Caspian which come and go naturally because of the wind movements".

There won't be 82 islands, however, even if there are 82 wells, because each
rig, whether on a barge or on land, can drill several wells - one vertical and
several off at an angle. Johnson, however, warns against putting too much faith
in western horizontal drilling techniques: the record for a horizontal well is
about 5km, and Kashagan's distance from the shore is 10 times that.

What Kashagan shows dramatically is how difficult the balance of risk and reward
is becoming as the world runs out of easy oil deposits.

Ordinary Kazakhs are understandably nervous. In the late 1980s, an oil fire at
Tengiz burned for a year, and they know that a comparable accident at Kashagan
could be disastrous.

Yet it is the Daukayevs, not the Chernovas, that run the country. "Kashagan will
determine the economy of our country," says the Atyrau governor.

The oil companies also have a balance to strike. They will be pushing for profit
and recompense on their big Kashagan outlays, but equally know what damage a big
Caspian oil spill could do to their worldwide image.


http://timeoff.ft.com/weekend


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                        Financial Times (London,England)

                             July 10, 2001 Tuesday
                                London Edition 2

Abbot wins Iran oil contract

BYLINE: By MATTHEW JONES

SECTION: COMPANIES & FINANCE UK ; Pg. 28

LENGTH: 350 words


Abbot Group, the UK's largest oil-drilling contractor, said yesterday it had won
its second contract in Iran this year after being appointed as the onshore
driller for the Dorood field development on Kharg Island.

The Dollars 50m (Pounds 36m) contract, with TotalFinaElf of France, comes as
international oil companies are testing US resolve over its Iran-Libya Sanctions
Act.

The legislation, which is expected to be extended by Congress next month,
threatens penalties against non-US companies investing in the energy sectors of
those countries. However, Japan's National Oil Corporation on Sunday signed an
agreement to fund seismic analysis of the large Azadegan oilfield and last week
Eni of Italy signed a Dollars 920m development contract for the Darkhoein field.

Abbot's contract will be carried out by its KCA Drilling subsidiary and involves
drilling 28 production wells over three years. It follows a contract in March to
manage two offshore drilling rigs in Iranian waters for the National Iranian Oil
Company.

Alasdair Locke, executive chairman of Abbot, said the group had ambitions to
build a position in the Iranian oilfield services market in the next few years.

"We are actively pursuing other onshore and offshore opportunities and we are
hopeful that Dorood will soon be followed by other contract awards," he said.

Michael Salter, chief operating officer, added that the company did not expect
to be damaged by US sanctions because its only business activities in the US
were a marketing office in Houston.

European and Japanese oil groups are increasingly confident that the US will not
risk a trade war by levying ILSA penalties, which have never been imposed since
they were brought into law in 1996.

Other oil companies negotiating deals in Iran include BP, Royal Dutch/Shell and
Enterprise Oil.

Eni is the leading foreign oil company in Iran with four big projects. Its deal
is expected to start a trend for other western companies by setting
unprecedented performance-related payments rather than agreeing a normal
production-sharing contract, which is illegal in Iran.

LOAD-DATE: July 10, 2001

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                        Financial Times (London,England)

                              July 9, 2001 Monday
                                London Edition 1

Japan deal over work on Iran oilfield

BYLINE: By GUY DINMORE

SECTION: INTERNATIONAL ECONOMY ; Pg. 9

LENGTH: 385 words


Japan's National Oil Corporation (JNOC) signed a Dollars 10m (Pounds 7m)
agreement yesterday to fund seismic analysis of Iran's giant Azadegan oilfield,
which is under negotiation to be developed by a consortium of Japanese companies
and the Royal Dutch/ Shell Group.

The agreement on 3-D seismic work, to be carried out by Western G-Co, an
Anglo-Norwegian company, marks the first step in Japan's intended development of
Azadegan, with estimated oil in place of some 25bn barrels and recoverable
reserves of 6bn.

Mahmood Mohaddes, board member of Iran's National Oil Company (NIOC), said
negotiations on developing Azadegan, which lies along Iran's border with Iraq,
could be completed by the end of this year.

Japan turned to Iran as a long-term source of oil supplies after the Tokyo-based
Arabian Oil lost its drilling rights in the Saudi Arabian section of the Kafji
oil field early last year.

The Japanese consortium, comprising JNOC, Japan Petroleum Exploitation,
Indonesia Petroleum and Tomen, negotiated a one-third stake with Shell in what
would be Japan's biggest oil development project. Bijan Zanganeh, Iran's oil
minister, said NIOC was still studying Shell's participation. NIOC sources
indicated it would be approved.

Development of Azadegan will deal another blow to US efforts to prevent
investment in Iran's energy sector, following Tehran's signing of a separate
Dollars 920m oil development deal with Italy's Eni last week.

The US Congress is expected next month to extend the Iran-Libya Sanctions Act
which threatens sanctions against non-US companies investing in the energy
sectors of those countries. But Takeo Hiranuma, Japan's trade, economy and
industry minister, told reporters in Tehran he was not concerned about US
pressure.

Japan won first negotiating rights for Azadegan after agreeing on Dollars 3bn of
pre-payments for Iranian oil during a visit to Tokyo last year by President
Mohammad Khatami. Mr Zanganeh declined to comment on reports valuing the
proposed Azadegan deal at Dollars 8bn, while Mr Hiranuma said it was too early
to say.

Yesterday's contract also appears to end involvement in Azadegan by Conoco, the
US oil major, which, according to Iranian officials, had carried out 2-D seismic
evaluation of the field. For more reports see www.ft.com/globaleconomy

LOAD-DATE: July 8, 2001

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                        Financial Times (London,England)

                              July 2, 2001 Monday
                                London Edition 1

Eni oil deal linked to performance payments IRAN ENERGY ITALY BREAKS NEW GROUND:

BYLINE: By GUY DINMORE

SECTION: WORLD NEWS - EUROPE ; Pg. 5

LENGTH: 400 words

DATELINE: TEHRAN


Eni, the Italian energy group, has broken new ground in Iran by signing a
Dollars 920m (Pounds 654m) oil contract linked to unprecedented
performance-related payments likely to set the trend in Tehran's negotiations
with other western oil giants.

With development of the onshore Darkhoein field, its fourth major oil and gas
project in Iran, Eni will be the largest foreign contractor to Tehran. It may
also become the focus of concern for the US which has sought, with little
success, to curb investment in Iran's energy sector.

The US Congress is debating whether to extend, for five or two years, the Iran-
Libya Sanctions Act (Ilsa) that permits the president to impose penalties on
non-US companies investing in the energy sector of those two countries.

But European oil companies appear confident that President George W. Bush will
not risk a trade war by levying Ilsa sanctions, which have never been imposed
since the act became law in 1996.

US oil companies are barred from working in Iran under separate executive orders
issued in 1995.

Analysts in Tehran said Iran's clerical regime wanted to demonstrate to the US
the failure of its oil sanctions. But more interesting to oil majors such as
Shell, BP, TotalFinaElf and a Japanese consortium, all negotiating their own
future deals, was the nature of the Eni contract that provides for incentives
and penalties linked to performance.

Iran's constitution forbids foreign companies from holding production-sharing
agreements or operating oil fields. But under the "buy-back" system introduced
in 1995, overseas groups develop fields to be handed over to the Iranian
operator which then pays a pre-agreed amount with the oil produced.

After what Vittorio Mincato, Eni CEO, described as "long and complex"
negotiations, the two sides agreed on a modified formula whereby the National
Iranian Oil Company (NIOC) would have "sole control" over operating the field,
but Eni would be part of a joint "production marketing committee".

In the second stage of developing Darkhoein, with output set to reach 160,000
barrels per day (bpd), payment to Eni would be linked to 16 production tests
over four years, a joint statement said.

NIOC has the right after the first two-year stage of development, when output is
targeted at 50,000 bpd, to decide whether to proceed with the next stage.
Penalties are also set if Eni fails to meet Iranian content.

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                        Financial Times (London,England)

                              July 2, 2001 Monday
                                 USA Edition 2

US faces test on Iran sanctions ITALIAN GROUP'S OIL DEAL MAY CHALLENGE WHITE
HOUSE EFFORTS TO CURB ENERGY INVESTMENT IN TEHRAN:

BYLINE: By GUY DINMORE

SECTION: WORLD NEWS - EUROPE ; Pg. 1

LENGTH: 528 words

DATELINE: TEHRAN


Eni, the Italian energy group, has broken new ground in Iran by signing a
Dollars 920m oil contract linked to unprecedented performance-related payments
that are likely to set the trend in Tehran's negotiations with other Western oil
giants.

Eni may also become the focus of concern for the US which has sought, with
little success, to curb investment in Iran's energy sector. With development of
the onshore Darkhoein field, its fourth big oil and gas project in Iran, Eni
will be the largest foreign contractor to Tehran.

Congress is debating whether to extend, for five or two years, the Iran-Libya
Sanctions Act (ILSA) that permits the president to impose penalties on non-US
companies investing in the energy sector of those countries.

But European oil companies appear confident that President George W. Bush will
not risk a trade war by levying ILSA sanctions, which have never been imposed
since the act became law in 1996. US oil companies are barred from working in
Iran under separate executive orders issued in 1995.

Analysts in Tehran said Iran's clerical regime wanted to demonstrate to the US
the failure of its oil sanctions. But more interesting to leading oil groups
such as Shell, BP, TotalFinaElf and a Japanese consortium, all negotiating their
own future deals, was the nature of the Eni contract that provides for
incentives and penalties linked to performance.

Iran's constitution forbids foreign companies from holding production-sharing
agreements or operating oil fields. But under the "buy-back" system introduced
in 1995, overseas groups develop fields to be handed over to the Iranian
operator, which then pays a pre-agreed amount with the oil produced.

After what Vittorio Mincato, Eni CEO, described as "long and complex"
negotiations, the two sides agreed on a modified formula, whereby the National
Iranian Oil Company (NIOC) would have "sole control" over operating the field,
but Eni would be part of a joint "production marketing committee".

In the second stage of developing Darkhoein, with output set to reach 160,000
barrels per day (bpd), payment to Eni would be linked to 16 production tests
over four years, a joint statement said.

NIOC has the right after the first two-year stage of development, when output is
targeted at 50,000 bpd, to decide whether to proceed with the next stage.
Penalties are also set if Eni fails to meet Iranian content, which analysts
believe has been set at 51 per cent for onshore fields. Eni's fee for the whole
project has been set at Dollars 220m, with capital expenditure no more than
Dollars 548m and bank charges of Dollars 152m.

Western oil representatives, while not seeing the details of the contract, gave
a guarded welcome to the new formula, which will encourage them to risk using
the latest technology and give them some kind of operating role.

They are worried more about the impact on business of Iran's factional politics
than the threat of US sanctions. Hardline opponents of President Mohammad
Khatami's pro-reform administration allege the oil industry is riddled with
corruption and are suspicious of foreign exploitation. Lukoil disappoints US,
Page 27 www.ft.com/energy

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                        Financial Times (London,England)

                            June 27, 2001 Wednesday
                                London Edition 3

Eni embroiled in Tehran spat over oilfield

BYLINE: By GUY DINMORE

SECTION: AFRICA & MIDDLE EAST ; Pg. 12

LENGTH: 603 words

DATELINE: TEHRAN


Italy's bid through Eni, the energy company, to become the biggest player in
Iran's oil and gas sector has become embroiled in Tehran's factional politics,
with parliament and the media fuelling a controversy over negotiations to
develop the Darkhoein oilfield.

Industry officials said Iran's inability to maintain current export levels
without substantial foreign involvement meant that the long-delayed deal,
reported to be worth up to Dollars 1bn (Pounds 700m), would still be signed with
Eni, perhaps next month.

But a growing political row over oil contracts with foreign companies in general
could persuade both sides to wait until President Mohammad Khatami reshuffles
his cabinet in August, when Bijan Zanganeh, the oil minister, is expected to be
replaced.

Politics and oil have been inseparable in Iran's modern history. Half a century
ago, Iran nationalised the oil industry, but decades of exploitation by the
Anglo-Iranian Oil Company have left a deep suspicion of foreigners. Darkhoein
has the added sensitivity of being the first onshore oilfield to be awarded to a
foreign company since Iran introduced its "buy-back" system in 1995. Foreign
contractors are paid to develop the fields in the oil that is produced, at a
pre-agreed rate.

Undeterred by the threat of US sanctions, Eni, which is 30 per cent owned by the
Italian state, is already involved in three offshore oil and gas projects in
Iran worth about Dollars 2.5bn.

The US Iran-Libya Sanctions Act, expected to be renewed by Congress shortly,
threatens punitive measures against foreign companies investing in the energy
sectors of those countries. But the act has never been enforced and European oil
majors do not regard it as a serious deterrent.

Eni was close to signing an agreement on Darkhoein with the National Iranian Oil
Company (NIOC) early last year. But after the Sirri field developed by France's
Total failed to meet expected output levels, Iran demanded that foreign
contractors should guarantee future production levels after handing over fields
to NIOC to operate.

Since Iran's constitution forbids foreign companies from operating fields or
holding an equity stake, Eni and others argued they could not give such
guarantees. For more than a year, negotiations were bogged down over the concept
of "modified buy-backs", where penalties and incentives would be linked to
performance but with a limited foreign operating role.

Other oil majors, namely BP, Shell and Total, see the Darkhoein contract as an
important benchmark for other fields out to tender.

But industry officials said the eventual Darkhoein deal would not be
substantially different from past buy-backs. Output would be targeted, but not
guaranteed, to reach a plateau of 160,000 barrels per day. This represents a
climbdown by the oil ministry that is likely to be seized upon by hardline
opponents of Mr Khatami's pro-reform administration.

Conservatives are furious with the reformist majority in parliament for
launching an investigation into the finances of Irib, the state broadcast
network controlled by hardliners. Their response has been to demand publication
of buy-back contracts while alleging foul play in signing deals with foreign and
domestic partners.

"Oilfields have been transformed into political and factional battlefields,"
Isna, a pro-reform news agency, reported.

Reformist MPs are resisting demands for new buy-backs to be individually
approved by parliament and past deals investigated. But a call by the supreme
leader, Ayatollah Ali Khamenei, to tackle corruption means that the oil sector
is likely to come under close scrutiny.

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                        Financial Times (London,England)

                            June 27, 2001 Wednesday
                                 USA Edition 2

Japanese minister to visit Iran for oil talks

BYLINE: By BAYAN RAHMAN

SECTION: AFRICA, MIDDLE EAST & INTERNATIONAL ECONOMY ; Pg. 4

LENGTH: 384 words

DATELINE: TOKYO


Takeo Hiranuma, Japan's trade minister, will visit Iran next month for
negotiations on a Japanese oil consortium's bid to explore Iran's Azadegan
oilfield.

The visit will be the first by a Japanese trade minister since 1979 and
emphasises the importance that Tokyo places on the deal, worth about Dollars
8bn. It could be Japan's largest oilfield development project if assumptions
about Azadegan prove right.

Mr Hiranuma's visit to Iran will come at the end of a tour starting on Tuesday
of Japan's other main oil partners - Saudi Arabia, Kuwait and United Arab
Emirates. Japan is negotiating the renewal of a drilling contract with Kuwait
and Japan's Abu Dhabi Oil is seeking to increase production in the UAE.

Japan is dependent on oil imports, 85 per cent of which were from the Middle
East last year. The loss of a concession last year in Saudi Arabia's part of the
Neutral Zone between Saudi Arabia and Kuwait was a blow to Japan. It was also an
incentive for Tokyo to expand oil supplies from other countries and to improve
its bargaining position.

In November, Iran granted Japan first negotiating rights to develop part of the
Azadegan oilfield, but the Japanese consortium, comprising Indonesian Petroleum,
Japan National Oil, Japan Petroleum Exploration and Tomen trading company,
sought a European partner among Royal Dutch/ Shell, TotalFinaElf and BP.

It chose the Anglo-Dutch oil group because of the company's technological
know-how and involvement in other Iranian oil projects, Japanese government
officials said.

Investment in the Azadegan development was expected to be about Dollars 8bn but
the Japanese consortium and Royal Dutch/Shell were still negotiating who would
bear the larger share of the cost, the officials said.

Mr Hiranuma is expected to pledge the government's financial support for the
project during his meetings in Tehran. Japan has already offered Iran a Dollars
3bn credit line over three years as a sweetener.

The Japanese are gambling on the US not implementing the Iran-Libya Sanctions
Act, which looks set to be extended for five years from August. The act bars US
oil companies from doing business with Iran and allows the president to impose
sanctions on non-US companies investing in Iran's energy sector. For more
reports see www.ft.com/globaleconomy

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                        Financial Times (London,England)

                              June 22, 2001 Friday
                                London Edition 1

Oil deal will test US sanctions on Iran

BYLINE: By EDWARD ALDEN and FRED KAPNER

SECTION: MIDDLE EAST & AFRICA ; Pg. 11

LENGTH: 489 words

DATELINE: MILAN and WASHINGTON


ENI, the Italian energy company, is expected this weekend to sign an agreement
to develop an oilfield in Iran, in a test of the Bush administration's
willingness to enforce US sanctions on foreign energy groups doing business
there.

The Clinton administration waived the 1996 Iran-Libya Sanctions Act (ILSA) in
the one previous test case involving European companies, and chose not to pursue
several other potential violations. The industry believes President George W.
Bush also will not want to cause friction by punishing European companies.

A US congressional committee, however, on Wednesday voted to renew the law,
which expires in August, for another five years. The White House had proposed
extending it for only two years, but US conservative lawmakers want a tough line
against both Iran and Libya. The conservatives fear Iran will use oil revenues
to fund international terrorism, and also want to punish Iran for its hostility
to Israel.

A State Department official said yesterday the US had raised concerns over the
proposed investments with the companies and governments involved. He said the
proposal would be looked at with regard to ILSA.

Despite the law, ENI, Royal Dutch/Shell, TotalFinaElf and BP in recent years
have agreed large projects in Iran without fall-out from the US. Those oil
companies, and a Japanese consortium, were now close to completing several more
deals, but held back from signing them in recent months until this month's
elections in Iran were held, industry executives said.

The re-election of Mohammad Khatami, Iran's reformist president, paves the way
for ENI to sign an agreement it has been working on for more than a year,
although a delay in the signing could occur as Mr Khatami has not yet named his
new cabinet.

ENI declined to comment on reports that Vittorio Mincato, ENI's chief executive,
would be in Iran on Sunday to sign a Dollars 1bn (Pounds 710m) deal to develop
the Darkhovin oilfield in western Iran.

In April BP signed an agreement with Iran to conduct a year-long study to
develop a large liquefied natural gas project. BP, ENI and other non-US oil
companies last autumn also bid to develop three oilfields in Iran's Bangestan
region.

A year ago ENI signed the biggest deal ever with Iran when it agreed to a
Dollars 3.8bn project to develop the South Pars natural gas field in the Gulf.

ENI is also leading a consortium to develop a potentially huge oilfield in
Kashagan, Kazakhstan, whose oil could eventually flow through Iran if a pipeline
is built there against US wishes. TotalFinaElf last month agreed with Iran to
study the feasibility of such a pipeline.

Analysts say such a pipeline would lead to cheaper transport costs for the
Kashagan oil than a planned pipeline to Turkey, which the US is backing. ENI
executives have said several pipelines could branch out of Kashagan, including
one through Russia. Additional reporting by Edward Alden in Washington

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                        Financial Times (London,England)

                             June 21, 2001 Thursday
                                London Edition 1

BP chief puts his weight behind Baku pipeline plan

BYLINE: By LEYLA BOULTON and DAVID STERN

SECTION: INTERNATIONAL ECONOMY ; Pg. 12

LENGTH: 443 words

DATELINE: ANKARA and ISTANBUL


Sir John Browne, chief executive of BP, yesterday threw his weight behind a
Caspian oil pipeline, declared his company hoped to develop "sizeable" business
in Iran, and called for US action to help fight global warming.

In an interview, Sir John said he wanted "to remove as much doubt as possible,
if not all of it," surrounding his company's commitment to a planned pipeline
from Bakuthe Azeri capital, to the Turkish port of Ceyhan via Tbilisi in
Georgia.

He confirmed that BP, the leader of an international consortium to develop Azeri
oil reserves, was ready to start the detailed engineering study for the Dollars
3bn (Pounds 2.1bn) oil pipeline, with the aim of completing its construction by
the end of 2004.

Asked why BP, after early caution, was now convinced that the Baku-Tblisi-Ceyhan
project was commercially viable, Sir John said: "We're now much more certain
about the reserves," which in Azerbaijan's Azeri, Chriag and Ganashli fields
alone totalled 4.6bn barrels of oil.

In an encouraging sign that additional Kazakh volumes could be committed to the
pipeline, Vittorio Mincato, chief executive of Eni, the Italian group which is
exploring presumed large Kazakh reserves, announced yesterday in Istanbul that
his company was also keen to join the Dollars 150m study.

Sir John said BP ranked its planned Dollars 10bn investment in the south Caspian
over the next five years on a par with its "commitment to Saudi Arabia".

He played down suggestions that promoting a pipeline backed for strategic
reasons by the US - to develop former Soviet republics' independence from Russia
and discourage their use of Iranian export routes - could also help soften
potential US resistance to BP's scramble for business in Iran.

"I'm never a believer in total linkage but rather in case-by-case (consideration
of issues)," he said. "The fact is we're not an American company," he added.
More than 40 per cent of BP's assets are in the US.

Although BP had "started a bit later" than other companies to explore Iranian
opportunities - partly in order to "not unnecessarily upset our US interests" -
Sir John said BP hoped to "get some sizeable" business in Iran, but gave no
details of the "variety of fronts" it was pursuing. Reuters adds from
Washington: A US House of Representatives panel yesterday endorsed a five-year
extension of sanctions against Iran and Libya, brushing aside a White
House-backed proposal to limit the renewal to two years.

On a 41-3 vote, the House International Relations Committee backed a renewal of
the Iran-Libya Sanctions Act in an effort to curb foreign investment in the oil
and natural gas sectors of both countries.

LOAD-DATE: June 20, 2001

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                        Financial Times (London,England)

                            June 20, 2001 Wednesday
                                London Edition 1

Macapagal tries to tackle separatist rebels on two fronts: Philippine
president's war against forces in Basilan coincides with start of talks with
another faction. Roel Landingin reports:

BYLINE: By ROEL LANDINGIN

SECTION: ASIA-PACIFIC ; Pg. 10

LENGTH: 873 words


President Gloria Macapagal-Arroyo has brandished both gun and olive branch at
the Muslim rebels of the Philippines.

Her representatives are due to begin talks today in Libya with the Moro Islamic
Liberation Front (MILF), the biggest of three Muslim rebel groups, while
Philippines armed forces are mounting an all-out war against the Abu Sayyaf
extremists who are holding more than 20 hostages in the southern island of
Basilan.

The third Muslim force, the Moro National Liberation Front (MNLF), signed a
peace agreement with the government in 1996. Its chairman, Nur Misuari, presides
over the four Muslim-dominated provinces that voted in a plebiscite to compose a
government-sponsored autonomous region.

The MILF, led by Hashim Salamat, a Middle East-educated scholar of Islamic
theology and philosophy, used to be the smallest of Mindanao's multiple armed
bands. Mr Salamat broke with the National Liberation Front after Mr Misuari
agreed to drop his campaign for independence in favour of autonomy, on the
advice of the Organisation of the Islamic Conference (OIC).

Mrs Macapagal hopes the talks in Libya will eventually bring an end to three
decades of separatist fighting, which have cost at least 100,000 lives and held
back progress in resource-rich Mindanao, home to a fourth of the nation's 76m
people but also registering the lowest per capita income levels.

Eduardo Ermita, a retired general and Mrs Macapagal's adviser on the peace
process, says the discussions will focus on establishing systems to monitor and
enforce the 1997 ceasefire agreement between the armed forces and the
15,000-strong MILF army.

Future discussions - to be held in Malaysia or Indonesia - will deal with more
substantive issues such as political and religious autonomy and economic
development for the Philippines' 4.5m Muslims, who make up a quarter of
Mindanao's population, he says.

Mr Ermita believes the talks are likely to succeed because of the participation
of third parties such as Libya, Malaysia and Indonesia, which are expected to be
moderating influences on the Muslim rebels.

"With the Libyan and Malaysian officials as observers, we feel that some
unreasonable positions can be corrected and maybe the environment for the talks
can be improved," he says.

Previous talks collapsed in March last year after the now deposed president
Joseph Estrada launched military offensives to retake more than 40 MILF camps in
various parts of Mindanao, which resulted in the displacement of 200,000 people
living in rebel-controlled communities. The military success in driving MILF
forces from their camps may prove one of the stumbling blocks.

Before the talks were abandoned last year the government was verifying the
MILF's claim to have 11 big and 33 minor military camps. Rebel leaders have said
they want to re-establish control over those bases, a demand the military
opposes.

"The appointment to senior positions of officers responsible for the all-out war
policy against the MILF last year may not augur well for the peace talks," says
Eliseo Mercado, a Roman Catholic priest who was part of the team monitoring the
1997 government-MILF ceasefire agreement.

The main challenge facing Mrs Macapagal is to come up with a package of
concessions to satisfy the MILF's demands for autonomy without violating the
country's territorial integrity.

The framework for the 1996 peace settlement with the National Liberation Front -
greater participation for MNLF leaders in the administration of nominally
autonomous provinces - may no longer suffice this time, according to Glenda
Gloria, co-author of a book on the Muslim rebellion published last year.

The MILF's maximum demand is the establishment of an independent Islamic state
in the Muslim heartland of Mindanao, but its leader, Mr Salamat, has said they
are willing to accept a temporary solution short of independence as long as this
allows them to practice an Islamic way of life.

Ms Gloria says a possible compromise that both the government and the MILF can
explore is the conversion of the former rebel camps into self-sustaining,
autonomous Islamic communities, where Sharia, or Islamic law, prevails.

"The MILF is willing to reconsider its demand for an independent Islamic state;
perhaps the government can reciprocate by allowing them to form autonomous
communities where they are allowed to live and govern themselves according to
Islamic principles," she says.

Soliman Santos, an expert on constitutional law at the University of the
Philippines, has written that it is possible to find a constitutional solution
to accommodate the MILF's demands for Islamic government in selected areas in
Mindanao without dismembering the nation-state. He says the Philippines can
perhaps learn from the establishment of the Hong Kong special administrative
region under Chinese rule in accordance with the principle of "one country, two
systems".

Finding a constitutional solution to the MILF's demands is not the only
challenge. Mrs Macapagal must also seek support for the peace accord among
military and political leaders, including the majority Christian population in
Mindanao who are always critical of efforts to expand Muslim autonomy.

"It's not going to be easy," says Ms Gloria.

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                        Financial Times (London,England)

                            June 20, 2001 Wednesday
                                London Edition 2

Fears grow on US bill for market sanctions SUDAN ACT EFFORT TO DERAIL
LEGISLATION:

BYLINE: By EDWARD ALDEN and KEN WARN

SECTION: INTERNATIONAL ECONOMY, MIDDLE EAST & AFRICA ; Pg. 12

LENGTH: 502 words

DATELINE: WASHINGTON and TORONTO


US business groups and the Bush administration will try to derail legislation
that would exclude some foreign companies from US stock markets if they run foul
of US foreign policy.

Concern has grown after Talisman Energy, the Canadian oil company, warned this
week it would sell its controversial stake in a Sudan oil project if the US
Congress pushed forward with threats to de-list the company from the New York
stock exchange.

Jim Buckee, Talisman's chief executive, said in Calgary on Monday that the Sudan
Peace Act, passed by the House of Representatives last week on a 422-2 vote,
could force the company to pull out of Sudan rather than risk losing access to
US capital markets.

Mr Buckee said the bill was "dangerous" and would "send a big chill through all
other foreign investors who potentially want to list in the US".

US companies are barred from Sudan, and there is growing support in Congress for
measures that would in effect block foreign companies as well. US legislators
hope that depriving the Khartoum government of oil revenues would end the civil
war in Sudan, which has claimed about 2m lives during two decades.

The Bush administration opposes two measures in the bill. The stronger language
would prohibit any company engaged in oil or gas development in Sudan from
raising capital in the US or trading its securities on US exchanges. These could
include not only Talisman but Petro-China, China's national oil company, and
Sweden's Lundin Oil. A second, milder provision would simply require that all
companies doing business in Sudan disclose that to the Securities and Exchange
Commission.

The bill must still be taken up by the Senate, which last year defeated attempts
to include capital markets sanctions in a bill on Chinese weapons proliferation.

David Strongin, director of international finance for the Securities Industry
Association, said the Sudan bill would be "bad for capital markets, bad for
investors and bad for business", and would encourage companies to seek listings
outside the US.

The Sudan effort, however, is the most concrete sign yet that a capital markets
sanction provision could be enacted into US law.

President George W. Bush has said he wants to help curb the war in Sudan, and
faces pressure from Christian groups with strong ties to Republican
conservatives. The Sudanese war has pitted a succession of Muslim governments in
the north against Christian secessionist rebels in the south, where US
evangelical groups are active.

"Given the truly extraordinary political profile of Sudan in Washington,
President Bush simply can't afford to veto any version of a Sudan Peace Act,"
said Eric Reeves, a Smith College professor who has spearheaded the campaign for
sanctions against oil companies in Sudan.

The issue could easily spread beyond Sudan, however. The SEC last month, under
congressional pressure, said it would now require companies to disclose
operations in any country under US sanctions, including North Korea, Cuba, Iran,
Iraq and Libya.

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                        Financial Times (London,England)

                              June 18, 2001 Monday
                                London Edition 1

Beyond Kyoto: Critics of the US should start looking for alternative ways of
tackling climate change, say Philip Gordon and J:

BYLINE: By PHILIP GORDON and JAMES LINDSAY

SECTION: COMMENT & ANALYSIS ; Pg. 19

LENGTH: 828 words


The best that can be said about US-European Union discussions last week on
global warming is that both sides had a chance to air their views. President
George W. Bush insisted that the Kyoto Protocol was fatally flawed and that more
studies were needed before deciding what to do. European leaders countered that
it was time to act and that Kyoto was crucial to avoiding a global catastrophe.

Diplomatic niceties, however, cannot paper over the chasm that separates these
two views. Indeed, the intensity of the split could well match that of the
dispute over the Iran-Libya Sanctions Act, a quarrel that, during the late
1990s, infected virtually every aspect of transatlantic relations.

Disagreements over global warming can be prevented from following a similar
path, but only if both US and European leaders start putting long-term
environmental concerns above domestic politics. Last week's talks were not
promising in that respect.

Europeans, hoping that the US public will solve the problem by forcing Mr Bush
to embrace Kyoto, are likely to be disappointed. Few Americans list global
warming as a top concern or worry that it will threaten them in their lifetime.
And while two out of three Americans say the US should act to avert climate
change, less than half say they would pay 25 cents more for a gallon of gasoline
to help it do so.

Democrats, newly in control of the Senate, no doubt hope to change those
assessments. But Mr Bush has two strong talking points, especially now that he
grants - however grudgingly - that global warming is occurring.

One is that the four-year-old Kyoto accord it has yet to be ratified by a single
European country, most of which have made little progress in curbing their own
emissions. In fact, only Britain and Germany have succeeded in curbing
emissions, and the latter has done so only because Kyoto's counting rules allow
it to take credit for shutting down East Germany's highly inefficient
industries.

Bush can also credibly assert that Kyoto is unfair because it exempts big
emitters such as China and India. Americans will recoil from any treaty that
does not ask all countries to play a role in preventing climate change.

Europeans, therefore, are likely to face a US administration unwilling to budge
from its view that the Kyoto agreement is a non-starter.

Europe can thus proceed in one of two ways. The first is to continue on its
present course of criticising Mr Bush for failing to see Kyoto's merits and
calling for him to change course.

That strategy is politically convenient and emotionally satisfying, given
widespread European irritation at the US president's high-handed dismissal of
Kyoto. Yet it will do nothing to curb the growing emission of greenhouse gases.
It may even be counterproductive, fuelling suspicions - found not just in the US
- that Europe prefers posturing to the pursuit of actual emission cuts.

The other choice would be to pursue a policy commensurate with Europe's claim
that it is ready to play a leadership role in world affairs. Such a strategy
would consist of three elements. First, Europe should admit that Kyoto is dead.
The cause of preventing climate change is not served by pretending that the
treaty provides a workable framework for reducing carbon emissions. The targets
are too ambitious to be realistic and the demands unfairly distributed among
countries.

Second, Europe should take the initiative in proposing an alternative treaty
framework that still calls on the US to make deep cuts in emissions but that
addresses Mr Bush's legitimate complaints about Kyoto. That means offering a
sensible emissions trading programme, a market-based approach that can
substantially decrease the cost of reducing emissions.

It also means creating a mechanism for bringing developing countries into the
process. Proposing an alternative treaty that acknowledges US concerns would put
pressure on Mr Bush to put up or shut up on his pledge to work within the 1992
United Nations Framework Convention on Climate Change.

Third, Europe should honour its own pledges to cut its greenhouse gas emissions
unilaterally and challenge Mr Bush to live up to his own repeated promises to
take the issue seriously. Tangible European progress on reducing emissions would
rebut his accusation that Europe is all talk and no action and expose his
unwillingness to support anything but further study of the issue as the cop-out
that it is. It would also give political ammunition to those in the US who
support more aggressive policies to combat global warming.

No doubt such a strategy would be difficult for many Europeans to swallow. It
requires putting aside their indignation over the Bush administration's
unwillingness to endorse Kyoto. But the real issue is not how to score political
points but to make progress on preventing climate change. Both European and US
leaderships need to show they know the difference.

The writers are senior fellows at the Brookings Institution

LOAD-DATE: June 17, 2001

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                        Financial Times (London,England)

                              June 15, 2001 Friday
                                London Edition 1

Time for Europe to grow up: The continent can hardly complain about American
unilateralism if it fails to take responsibility for its own destiny

BYLINE: By PHILIP STEPHENS

SECTION: COMMENT & ANALYSIS ; Pg. 17

LENGTH: 1103 words


Every now and then US policymakers are heard to remark that Europe's moment has
passed. The future, good and bad, lies with Asia. America has tired of its role
as Europe's over-generous uncle. The children are ungrateful and fractious. Let
them grow up and take care of themselves. Washington has more pressing
interests.

At this point I am inclined to recall Zbigniew Brzezinski's characterisation of
the transatlantic relationship. Mr Brzezinski, who served as national security
adviser to President Jimmy Carter and now teaches, speaks with refreshing
bluntness about the global strategic balance.

Western Europe, he observes, is an "American protectorate". The allies remind
him of the vassals and tributaries of empires past. Britain, which to my mind
has treasured its "special relationship" much as a teenager clings to a
favourite, battered teddy bear, is to be flattered and ignored. "Its friendship
needs to be nourished but its policies do not call for sustained attention."
Ouch.

Mr Brzezinski, of course, does not speak for the present US administration, or
indeed for the last. Many in Washington would quarrel with his candid
celebration of US hegemony, his visceral suspicion of Russia and the caustic
brutality of his analysis. For all the caveats, though, he captures an important
truth.

Wherever else it may cast its gaze (and, of course, it cannot ignore China) the
concentration of America's interests - economic, political and military - is
still in Europe. Take a few figures. The European Union accounts for 45 per cent
of all US investment overseas. It is by far the biggest market outside the US
and is worth more than Dollars 250bn a year to American exporters. The EU has
provided 60 per cent of all foreign investment in the US. Even for the world's
sole superpower, those are pretty big numbers.

Geography defines the continent's pivotal security role. Russia, Iraq and Iran,
Libya, the Israeli/Palestinian cauldron, Afghanistan, the Caucasus: the myriad
threats to US economic and political security, real or imagined, lie on Europe's
periphery. Self-interest demands of any US administration that it safeguards its
postwar role - enshrined in the Nato alliance - as Europe's pre-eminent power.

Hegemony, of course, comes with a price tag. American taxpayers must be asked to
dig into their pockets in defence of freedom in countries of which they have
heard nothing and care less. Sending GI's to Kosovo does not play well in
Kansas. From time to time, US presidents must pay lip service to the fiction of
an equal partnership with its European allies. But the occasional show of
humility and a few billion dollars extra on the Pentagon's colossal budget
represent investments that repay themselves many times over.

George W. Bush, it seems, has come to that conclusion. For a European, watching
him backslap his way across the continent this week has stirred much unease -
albeit tinged with a certain admiration. Amid the mainly polite bleating in
Brussels and Gothenburg about the Bush administration's policies, the
president's trip should also have prompted real soul-searching among his
European hosts.

Those leaders who have met Mr Bush say he is genuinely charming and, no, not at
all stupid. His frequent wrestling matches with the English (and Spanish)
languages do not get in the way of his meaning. The message is as clear as it is
uncomfortable.

The US will consult its European allies on issues as diverse as Missile Defence
(as it is now called), relations with Russia, the Middle East and North Korea
and climate change. It will take care to avoid the mistake it made over the
Kyoto protocol when it spoke first and only later sought to explain. It wants to
dispel the idea that it is instinctively unilateralist. But, and here make no
mistake, Mr Bush has views. And he intends to stick with them.

My own judgment is that there can never be an agreement between the US and its
European allies on Missile Defence. The best (if that is the right word) that
can be hoped for is an accommodation - and that is contingent on Mr Bush
offering a sufficiently generous financial package to President Vladimir Putin
to secure Russian acquiescence. For now, the modus vivendi seems to rest on
mutual restraint. European leaders (save perhaps Jacques Chirac) tone down
criticism of MD while Mr Bush quietens those in Washington (led by Donald
Rumsfeld at the Pentagon) who are alarmed by the EU's plans to build its own
defence identity.

But MD exposes a fundamental divergence between American and European concepts
of security. The US wants to respond to the perceived threat to its homeland
from rogue states by building a stockade. It has the money and, it thinks, the
technology. It wants invulnerability alongside invincibility.

Europe can never aspire to such absolute security. Even if it had the resources,
it would be stymied by geography. Its long-term security rests on the projection
beyond its borders of stability and prosperity. Military and technological
capabilities can supplement but never substitute for a complex mix of politics,
trade and aid and diplomacy. This demands, in turn, a multilateral framework.

That is why Europe rightly fears US abrogation of the 1972 anti-ballistic
missile treaty. Most other disarmament and non-profileration agreements rest on
the foundation of the ABM treaty. Europe's nightmare sees the whole multilateral
edifice come crashing down.

Here, though, the Union must take a long hard look in the mirror. Even as they
gripe about Washington, European leaders refuse to take real responsibility. We
saw again this week how the US is defining Europe's boundaries by forcing the
pace on the admission of new members to Nato. Why? Because the EU's approach to
its enlargement is as slow as it is sullen. Europe thus surrenders the chance to
determine its own character.

We see the same sorry abdication in the tortuously slow progress towards the
realisation of a credible European defence force. Sure, men in uniforms now walk
the EU's corridor's in Brussels. But significant extra spending on defence or a
radical shake-up of those European defence forces still designed for a cold war
conflict? Much too difficult. And what about a new strategic relationship with
Russia? Well, there have been a few declarations.

No doubt Mr Bush's visit will be followed by more hand-wringing about US
unilateralism. Many of the concerns are justified. But I wonder how many
Europeans will admit the obvious. As long as they duck the opportunity to shape
the destiny of the continent, Washington will do it for them.

philip.stephens@ft.com

LOAD-DATE: June 14, 2001

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                        Financial Times (London,England)

                             June 14, 2001 Thursday
                                London Edition 1

President's dinner date sets tone for transatlantic ties

BYLINE: By PETER NORMAN

SECTION: WORLD NEWS - EUROPE ; Pg. 8

LENGTH: 534 words

DATELINE: GOTHENBURG


President George W. Bush will have his first brush with the often bewildering
world of European Union politics today when he sits down for talks with the
representatives of the would-be European superpower: a team of ministers,
commissioners and senior officials led by Goran Persson, the prime minister of
Sweden, and Romano Prodi, the president of the European Commission.

The talk between the world's two largest trading partners will include efforts
to kickstart a new round of trade liberalisation talks at November's World Trade
Organisation meeting and perhaps of recent successes in resolving disputes over
bananas and wheat gluten.

But Mr Bush will have to wait until the evening for the true test of the first
transatlantic summit since he took office. At a dinner, the first of its kind,
he will meet all the EU leaders together. It is here that he is expected to
discuss the transatlantic relationship in the context of the twin enlargements
of the EU and Nato.

The dinner will above all be important for setting the tone of relations at a
personal level between Mr Bush and the EU's leaders.

Mr Bush has clearly suffered a bad press ahead of this week's trip to Europe,
largely because of his rejection of the Kyoto agreement on climate change and
his anti-missile defence plans. But in earlier meetings with EU leaders he has
forged a good working relationship with Tony Blair, the UK prime minister, and
come to appreciate the ebullient nature of Jacques Chirac, the French president.

The relationship with Gerhard Schroder, the German chancellor, is less clear
cut, in part because of last month's leak of a German foreign ministry memo
detailing talks between the two men when they met in Washington in March.

The dinner will be an opportunity for Mr Bush to take the measure of the EU's
leaders as a group and see how they interact. They should also give him a chance
to expand on his ideas for developing his father's vision, when president, of a
"Europe whole and free" that would now include good relations with Russia and
Ukraine.

The day's earlier formal bilateral talks with the EU will also be marked by a
new effort to provide a greater impetus and focus for the relationship between
the two sides. There will be a single plenary meeting, rather than the series of
separate ministerial meetings that Washington felt bogged down previous summits,
leading to pressure from the US to reduce their frequency to once a year.

Disputes will still remain despite the change of format. On climate change, the
likeliest outcome is an agreement to disagree. On steel, Mr Prodi plans to
underline the EU's deep concern about US moves that could result in a blockage
of imports.

The Commission will also urge the new US administration to maintain the "truce"
that has so far restrained implementation of the Iran and Libya Sanctions Act
and the Helms-Burton law, which envisages sanctions for trading with Cuba.

But the summit should also emphasise how closely the EU and US work toget-her in
crisis areas of the Middle East and western Balkans and highlight plans for
greater co-operation on strategic issues, including fighting communicable
diseases and internationally organised crime.

LOAD-DATE: June 13, 2001

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                        Financial Times (London,England)

                             June 12, 2001 Tuesday
                                 USA Edition 2

Iran's election

SECTION: LEADER ; Pg. 14

LENGTH: 414 words


Iranians have handed the reformist president Mohammad Khatami another resounding
election victory, encouraging him to press ahead with efforts to establish a
more democratic and accountable government.

In theory, the renewed popular mandate should strengthen Mr Khatami's hand in
the long-running power struggle with conservatives. Unfortunately, the
experience of recent years suggests that his opponents have little respect for
the popular will.

Conservative clerics who control the judiciary, the armed forces and the
charitable foundations that dominate the economy are likely to continue their
attempts to undermine the president and roll back his reforms.

The landslide victory by reformists in last year's parliamentary election did
not prevent the conservatives from suppressing dissent. Since that election, the
hardliners have used the judiciary to close down virtually all reformist
newspapers and arrest several of the president's supporters.

Mr Khatami remains a force for stability in a volatile region, in spite of his
limited powers. His influence has been more pronounced in Iran's foreign
relations. He has improved ties with Arab neighbours and western governments and
paved the way for a healthy domestic debate over Iran's relations with the US.

In his second term, Mr Khatami can and should show more resolve. The west should
encourage him in that direction. European governments must make clear that
continued international backing depends on democratic progress at home as well
as Iran's behaviour in the region.

They also must warn against Iranian support for radical groups in the Middle
East and monitor closely allegations of Iranian attempts to acquire weapons of
mass destruction.

The Khatami victory should mark an opportunity for the US to relax its sanctions
against Tehran and broaden the dialogue between the two civil societies. The
unilateral sanctions have had limited impact and have hurt US companies.

The Bush administration is constrained by congressional resistance, as evidenced
by the campaign under way to renew the controversial Iran/Libya Sanctions Act,
which seeks to punish non-US companies investing in the two countries. But the
administration should try to reach a compromise with Congress, at least to limit
ILSA's renewal period.

Mr Khatami's re-election is unlikely to bring radical change to Iran. But his
presence remains a moderating influence on the Islamic republic's foreign
relations - and that deserves encouragement.

LOAD-DATE: June 11, 2001

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                        Financial Times (London,England)

                              June 11, 2001 Monday
                                  Surveys CAN1

Break up of rail giant is end of era

BYLINE: By KEN WARN

SECTION: SURVEY - CANADA ; Pg. 6

LENGTH: 907 words


Canadian Pacific, the company that built the coast-to-coast railway that helped
bind Canada together in the 19th century, will cease to exist in its present
form later this year. In February CP, an icon of corporate Canada, bowed to
pressure from shareholders who had long urged the company to shake off its
holding company discount.

After briefly looking at various permutations, the company decided to split its
five business divisions into separately quoted companies. The break-up marks the
end of an era and the ongoing demise of conglomerates in the face of global
financial pressures. The five new companies will have to find their way in
Canada's changing corporate landscape.

At CP's Calgary headquarters, there is sadness at the break-up among employees,
many of whom are seeking jobs elsewhere in the fast-growing local economy.

But at the highest levels of the company, there is no doubt that they have hit
upon the right plan. "There are no regrets," says CP's chief executive David
O'Brien. "This was clearly the best course of action. In the more sophisticated
financial markets conglomerates are steadily disappearing. People want to follow
a particular sector."

With formal approvals expected in the summer, followed by a vote of
shareholders, the split-up is expected to go ahead in October. Under the terms
of the break-up, the group's hotel and property interests will remain as the
only significant asset of the existing company. CP shareholders will receive new
shares in the spun-off operations.

Those operations comprise PanCanadian Petroleum, of which CP owns about 86 per
cent, and the group's 100 per cent stakes in Canadian Pacific Railway, CP Ships
and Fording Coal.

Investors seem to have taken to the break-up plan. The company's shares, which
were hovering just above CDollars 40 in early February, were trading above
CDollars 60 for most of last month.

However, as roadshows get under way this month, one problem is how to interest
shareholders and analysts in the group's smallest components. Interest in the
group has focused overwhelmingly on the two biggest businesses, energy and rail,
and not in what Mr O'Brien has called the group's "little jewels".

PanCanadian accounts for about half of CP's CDollars 20bn market capitalisation,
followed by the railway, which accounts for 25 per cent. Fording, the smallest,
comprises barely 7 per cent.

Both the hotel and shipping businesses have been growing faster than the railway
business in recent years, says Mr O'Brien, and have "potentially more upside"
than the rail division.

Shipping has little following among portfolio investors outside Asia, where
there are several quoted shipping companies. However, CP sees itself as leading
a trend within the industry in the west in seeking stock market listings.

The hotels division faced the same dilemma as many Canadian businesses - how to
expand beyond the confines of the small domestic market, especially since the
Canadian dollar has been steadily weakening against its US counterpart.

The company in recent years has leveraged its historic assets base - the hotels
built for the railway's customers - and transformed itself into the largest
luxury hotel operator in North America.

With the railway division facing a slowing North American economy, the jewel in
the CP crown remains PanCanadian. There is speculation about how all five of the
newly independent companies will fare in their respective sectors, and whether
they are likely to become buyers or targets in future consolidations.

But that speculation is particularly focused on PanCanadian, the dominant
producer in southern Alberta and one of Canada's most profitable energy
companies.

The company has an extraordinary asset base, stemming from its legacy from the
railway.

As an inducement to build the railway, CP was granted rights over much of the
land over which the railway passed. As a result, PanCanadian owns the mineral
rights in perpetuity over about 6.5m acres, primarily in Alberta.

The company pays a mineral tax of just 5 per cent to 6 per cent on production
from this land, whereas oil and gas companies have to pay royalties of 25 per
cent to 26 per cent on Crown land, which constitutes most of Canada's oil and
gas acreage.

Critics from Canada's other energy companies claim that PanCanadian has not been
aggressive enough in making acquisitions beyond its key land holdings in the
mature Western Canada basin.

"I bristle at the criticism that we have not been aggressive," says David Tuer,
PanCanadian's chief executive. He denies that the company has been over-cautious
as a result of being under CP's wing and maintains management has worked hard to
represent the interests of minority shareholders.

But undoubtedly PanCanadian will change when the link with CP ends. It carries
less debt than its competitors, says Mr Tuer, and will be looking to invest,
especially outside Canada. "But I would hate to build into our strategic plan
the necessity of an acquisition."

PanCanadian has already made moves overseas, including a North Sea acquisition
and securing offshore Brazilian acreage - where the company could start drilling
next year. In the longer term, the company expects to become active in Libya.

"If they execute well, there is no reason why they should not remain
independent," says one Calgary-based energy executive. "But if they don't, like
with the rest of us, someone could swallow them up."

Ken Warn

LOAD-DATE: June 10, 2001

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                        Financial Times (London,England)

                              June 5, 2001 Tuesday
                                London Edition 1

The captain of a very French multinational: INTERVIEW THIERRY DESMAREST,
TOTALFINAELF: The oilman insists the era of state control is over. But many
still regard his company as France's national champion, write David Buchan and
Victor Mallet:

BYLINE: By DAVID BUCHAN and VICTOR MALLET

SECTION: INSIDE TRACK ; Pg. 15

LENGTH: 1454 words


The days when French oil was an arm of the French state arelong gone. Corruption
cases involving Elf Aquitaine and themurkier side of French foreign policy are
still being heardin the Paris courts. Last month a former French foreign
minister and a former head of Elf received prison sentences. But Elf was
privatised in the mid-1990s and the era of blatant state interference came to a
definitive close last year when TotalFina took over Elf.

Thierry Desmarest, the Total career oilman who now runs the TotalFinaElf group,
personifies thechange. Under his stewardship, Total achieved an enviable
professional reputation for finding oil at the lowest cost in the industry. The
old jibe from its rivals that Total CFP, the former company name, stood for
"Total can't find petroleum" had been turned on its head.

Yet, from an interview with Mr Desmarest at the top of his group's 48- storey
tower at La Defense, Paris's business quarter, it becomes clear that the
emergence of TotalFinaElf as the world's fourth largest listed oil company has
been a very French affair.

Even if oil policy is no longer foreign policy, oil remains a highly political
industry. Most of TotalFinaElf's profits come from outside France, as do most of
its shareholders, and asked whether the company is "now really independent" of
the French government, Mr Desmarest replies "absolutely".

Yet there is the sense that the company, the country's biggest by market
capitalisation, will remain a French "national champion" in the eyes of the
people and politicians of France - with all the benefits and burdens that
implies.

The new group is largely the result of the merger of two large French companies,
quite eclipsing Total's cross-border acquisition of Petrofina of Belgium in
1999. As a result, TotalFinaElf has little of the multinational flavour that
marks Royal Dutch/Shell, the long-established Anglo-Dutch major, or BP, which in
the past three years has swallowed two US oil companies.

Bedding down the merger has been Mr Desmarest's big task. He arrived at the
company as a product of the government elite at Total 20 years ago but made his
way up through the exploration and production division. He became head of that
division in 1989 and then succeeded Serge Tchuruk as chief executive in 1995.

Seventy per cent of the synergies and cost savings from the merger with Elf and
Petrofina should come from better use of existing assets rather than job cuts,
Mr Desmarest claims. Most of these will be in refining and marketing. In the UK,
the three old companies each had a 4 per cent market share; these can be run
together with common logistics, procurement, advertising and branding. In
France, the merger helps the task of producing cleaner fuels, because the
refineries and petrochemical plants the company needs for this can now be linked
by pipeline and barge. The tendency for

Total to build refineries on the coast and Elf to build inland, has enabled
TotalFinaElf to link refineries right along the Seine and Rhone valleys.

Mr Desmarest also hopes to weave together the cultures of Total and Elf,
especially on the exploration and production side which swallows two-thirds of
his investment budget. Elf had the reputation for being "a technical pioneer,
and for taking risks", he says, while Total was a "clever follower" that made
the most of techniques developed by others as well as adopting strict financial
accountability. "With the size of TotalFinaElf," he says, "we can't just be a
'clever follower'."

Even in the restructuring, Total-Elf has been obliged to acknowledge its
responsibilities. "As France's largest company by far, we have to take
particular care that (our) employee adjustment plans are considered politically
acceptable by public opinion," Mr Desmarest says. The 4,000 redundancies flowing
from the merger are to be split equally between France and abroad. But the 2,000
foreign jobs have already been axed, while those in France are voluntary,
negotiated with the trade unions and will be largely finished only by the end of
this year.

Redundancies are "more difficult in continental Europe than in the UK and the
US, where adjustments are made immediately," explains Mr Desmarest.

In other ways, however, being French offers the group scope that other oil
multinationals cannot always exploit. In particular, the new group has a
typically French freedom to operate where it wants in the world.

For instance, TotalFinaElf has discussed with Iraq the development of such
oilfields as Majnoun and Bin Umar - though it will not sign any deal until UN
sanctions are lifted, Mr Desmarest insists.

The French group faces none of the unilateral sanctions that are imposed on US
companies. Hence, TotalFinaElf pursues a line independent of the US by, say,
going into Iran in defiance of US congressional sanctions (which attempt to
impose a secondary boycott on foreign companies investing in Iran and Libya).
Such a boycott can inhibit even non-US companies such as BP, which feels it has
to respect the US line because of its American assets. By contrast, the French
group has few assets in the US - other than in chemicals, which are largely
invisible to consumers (and therefore to congressmen).

And Mr Desmarest says he does not feel the lack of US oil assets, even with
President George W. Bush's new policy of encouraging US domestic energy
production. Apart from the chemicals, the only area of interest to him in the US
is deep-water exploration in the Gulf of Mexico. Onshore, "the US has some of
the most mature (oil) zones in the world and the scale of finds is generally
small".

TotalFinaElf has set itself a global target of increasing its oil and gas output
by 6 per cent a year up to 2005 and Mr Desmarest points out that in recent years
even the US majors have been switching their spending on exploration and
production outside the US.

Indeed, Mr Desmarest claims one of the reasons for Total's above-average
performance in finding and pumping oil has been its relative neglect of the US
in favour of newer zones such as west Africa and the Caspian Sea. Another factor
has been its willingness to use new techniques on established fields in
Thailand, Algeria, Iran, Qatar and Venezuela. As a result, "our cost of finding
oil has averaged 70 cents a barrel over the past five years".

In the quest for contracts, Mr Desmarest acknowledges government help. "There
are some areas of the world, such as the Middle East, that are particular hot
spots and where it is important to have the support of your government for a
contract." But there is nothing unusual about this, he claims. "When one sees a
US president picking up the phone to support US companies, I don't see why our
government shouldn't do the same."

This support from France's generally pro-Arab government probably has something
to do with the fact that TotalFinaElf has a wider spread of operations in the
Middle East than any other big group except for Shell. It has also won part of
Saudi Arabia's new big gas contracts, signed last weekend.

Although French foreign policy has been a help in the Middle East, it may have
been a hindrance in China, because of French arms sales to Taiwan. If so, Mr
Desmarest does not seem dismayed. He takes a cool view of the Chinese market
into which other oil majors have been scrambling. "The market may be very
promising. But it is not easy to make profits - ask those who invested in China,
some of them 15 years ago. You have to be very selective in investments. China
has some excellent businessmen who are happy to keep the profits for themselves
and the losses for their partners."

Now, the mix of oil politics is shifting. As one of the world's big oil groups,
TotalFinaElf finds its performance in terms of social, environmental and human
rights policies coming under ever more scrutiny. The 55-year-old Mr Desmarest
acknowledges the need to respond to such concerns.

Even so, in Burma, for instance, TotalFinaElf has been left in peace to invest.
The French government has pressed TotalFinaElf to ensure that it is not using
forced or child labour, while the company itself is running local social
programmes. But Paris is not pushing Mr Desmarest to go any further. By
contrast, Premier, a small British oil company, has come under public pressure
from the UK government to quit the country on the grounds that its investment
there is helping to prop up the military regime.

"The French government is perfectly aware - and we agree - that it is not for
private companies to take it upon themselves to get governments (such as Burma)
to change their policies," he says. It is the kind of comment to make UK and US
oil executives envy the quintessential Frenchness of TotalFinaElf.

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                        Financial Times (London,England)

                             May 24, 2001 Thursday
                                London Edition 1

US moves to extend sanctions

SECTION: SHORTS ; Pg. 1

LENGTH: 24 words


US moves to extend sanctions

The US Congress is set to renew its economic sanctions on Iran and Libya,
perhaps for up to five years. Page 12

LOAD-DATE: May 23, 2001

LANGUAGE: ENGLISH

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                        Financial Times (London,England)

                             May 24, 2001 Thursday
                                London Edition 1

US Congress moves to extend sanctions IRAN AND LIBYA PRE-EMPTIVE ACTION MAY
COMPLICATE US ADMINISTRATION'S POLICY TOWARDS SANCTIONS AND CASPIAN SEA O:

BYLINE: By EDWARD ALDEN

SECTION: INTERNATIONAL ECONOMY, MIDDLE EAST & AFRICA ; Pg. 12

LENGTH: 459 words

DATELINE: WASHINGTON


The US is set to renew its economic sanctions on Iran and Libya, perhaps for up
to five years, despite the Bush administration's promise of a thorough review of
US sanctions policy.

The pre-emptive move by the US Congress will seriously complicate both the
administration's effort to re-think US sanctions, and its desire to expand US
access to new oil and gas supplies from the Caspian Sea region.

Representative Benjamin Gilman and Howard Berman yesterday introduced
legislation to extend the Iran-Libya Sanctions Act (ILSA) for five years. The
bill has more than 180 co-sponsors in the House, and could be pushed to a vote
as early as next month, well in advance of the August 5 expiry of ILSA.

On the Senate side, a companion bill has more than 60 co-sponsors, a solid
majority.

ILSA allows for US sanctions against any foreign company that invests in the
development of oil and gas resources in Iran or Libya. The bill has particularly
angered the European Union, which says that the US has no right to punish
foreign companies that are obeying the laws of their own countries. The White
House in March extended for one year an executive order that similarly bars US
companies from Iran.

The Bush administration had been expected to push for an easing of the Iran and
Libya sanctions. US oil companies with close ties to top Bush officials,
including Vice-President Dick Cheney and Commerce Secretary Don Evans, are eager
to resume operations in oil-rich Iran.

Also, the administration immediately launched a review of sanctions policy, and
has been working to ease the embargo on Iraq.

But congressional proponents of the sanctions regime, backed by the powerful
pro-Israel lobby, have moved aggressively to head off any debate over ILSA.

William Reinsch, president of the National Foreign Trade Council, a business
group that opposes sanctions, admits it will be "an uphill battle" to block
extension of ILSA. "The important thing will be what position the administration
takes."

But the administration has yet to take a position on ILSA renewal, leaving the
issue to the congressional hard-liners. The State Department is understood to
favour a shorter renewal of two years, and wants to broaden provisions allowing
the president to waive the sanctions.

The US waived sanctions in 1998 against Total of France, Gazprom of Russia and
Malaysia's Petronas, and reached agreement with the EU on co-operative
approaches towards Iran.

That agreement is expected to stand under the ILSA extension, which could blunt
EU anger over the law remaining on the books. The US has been examining a number
of other foreign oil industry investments in Iran, however, and will come under
growing pressure either to issue further waivers or to invoke sanctions.

LOAD-DATE: May 23, 2001

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                        Financial Times (London,England)

                             May 23, 2001 Wednesday
                                London Edition 1

Prospects bleak for US links with Iran: As Congress reviews US sanctions, the
relationship has been exacerbated by the Israeli conflict, writes Guy Dinmore

BYLINE: By GUY DINMORE

SECTION: MIDDLE EAST & AFRICA ; Pg. 13

LENGTH: 999 words


The Iran-US relationship is approaching a critical juncture. Congress and the
Bush administration are soon to complete a review of sanctions, while the
factional struggle in Tehran focuses on the presidential election next month
amid new allegations of a US-backed plot against the Islamic system.

Five months ago, the arrival of George W. Bush raised expectations on both sides
that the US would ease its unilateral economic embargo, and Iran's clerical
rulers would respond by taking the first steps to end their boycott of direct
political contact with "the enemy".

Instead, the long-troubled relationship is deteriorating further, mostly
exacerbated by the Israeli-Palestinian conflict, but also by divisions over
foreign policy within the Iranian leadership.

In an unexpected development, state television late last night announced that a
CIA spy had been hanged in Evin Jail on Sunday.

It said Mohammed Reza Pedram had confessed to spying during Iran's war with Iraq
in the 1980s and had been hanged after the Supreme Court had rejected his
appeal.

"It seems there is now no ray of hope, and the US will continue with sanctions,"
said Ali Hashemi, member of the Iranian parliament's energy commission and
former deputy oil minister, before last night's announcement. "But I don't agree
with the view that Iran is not able to expand its production capacity without
the US. We can easily do it with the Europeans, Asians and Australians."

This growing non-American involvement in Iran's oil and gas sector is at the
heart of debate within Congress over what to do with the Iran-Libya Sanctions
Act (ILSA) when its five-year lifespan expires on August 5.

ILSA was intended in 1996 to level the playing field between US oil companies
and their competitors by allowing the US to punish foreign companies investing
more than Dollars 20m in the energy sectors of Iran or Libya.

A year earlier, Bill Clinton, then president, cited Iran as a threat to national
security and issued two executive orders blocking virtually all US commerce with
Iran. The aim was to deprive Tehran of the money to develop weapons of mass
destruction and pursue acts of "terrorism".

Congress has started hearing testimony over ILSA and debate has been fierce.
There is a general recognition that if ILSA is left to lapse then Mr Bush would
lift the ban on US oil companies.

Benjamin Gilman, chairman of the House sub-committee on the Middle East and
South Asia who supports a five-year extension for ILSA, claimed Iranian
"behaviour" was worsening, in its training of "terrorists" and in arms
production.

He dismissed arguments that the US must somehow support Mohammad Khatami, Iran's
moderate president. "It doesn't matter how many liberal French philosophers
Khatami has read. He hasn't understood their true message," he declared. "We
cannot send a signal of lack of resolve to the rulers of Iran."

Howard Kohr, head of the influential American Israel Public Affairs Committee,
quoted from a recent State Department report that branded Iran as "most active
state sponsor of terrorism in 2000" with increased support to groups at war with
Israel such as Hizbollah, Hamas and Islamic Jihad.

Leaders of the three groups were among Islamic delegations who met at a Tehran
conference last month to back the Palestinian intifada (uprising). Both Mr
Khatami and Ayatollah Ali Khamenei, Iran's supreme leader, vehemently denounced
Israel, whose right to exist as a state is not recognised by Iran.

Although Iran denies giving military support to anti-Israeli groups, diplomats
in Tehran said the conference was hugely damaging to Iran's image in the west,
which had been much improved by Mr Khatami over the past four years.

US opponents of ILSA include more than 600 companies and institutes, grouped
under USA Engage. William Reinsch, vice-chairman of USA Engage, told Congress
that ILSA was "a very blunt instrument and a failed unilateral policy".

Speakers also pointed out that ILSA had never been enforced, largely out of
concern about provoking a trade war with the European Union. Mr Clinton issued a
waiver in the case of Total, the French oil group that was awarded a contract by
Iran to develop an oilfield originally given to Conoco.

Many US groups such as Halliburton and Schlumberger, world leaders in oil
services, have also found ways around US sanctions to continue Iran business,
raising charges of double standards.

The Bush administration has yet to take a view on ILSA and no decision is
expected before Iran's presidential election on June 8. US commentators say
there is wide support in Congress for renewing the act, possibly for two years,
but Mr Bush could probably prevent it.

An energy task force chaired by Dick Cheney, the vice-president and former head
of Halliburton, has recommended a review of all US sanctions, suggesting their
impact on US energy supplies should be considered.

Even if Mr Bush does decide on a change of policy towards Iran, two recent
developments could yet derail smooth progress.

The New Yorker magazine reported on May 14 that Louis Freeh, director of the
FBI, had given the administration a list of people, he says should be indicted
in the 1996 Khobar Towers bombing in Saudi Arabia that killed 19 US servicemen.
Iran has denied any involvement.

Last Thursday, Tehran's Revolutionary Court accused the CIA, acting through
Radio Liberty and Radio Free Europe, of funding Iranian nationalists plotting
against the Islamic regime.

More than 60 opposition activists have been arrested in Iran over the past two
months in connection with the alleged plot. Reformists in Tehran see the arrests
and allegations as an attempt by the hardline judiciary to undermine Mr Khatami
ahead of the election.

Control of foreign policy is disputed between Mr Khatami and his hardline
rivals. Conservative clerics are believed to be opposed to any political
relationship with the US and possibly even significant participation by US oil
companies in developing Iran's resources.

LOAD-DATE: May 22, 2001

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                        Financial Times (London,England)

                              May 21, 2001 Monday
                                London Edition 2

OMV plans stake in PKN Orlen

BYLINE: By ERIC FREY and JOHN REED

SECTION: COMPANIES & FINANCE INTERNATIONAL ; Pg. 24

LENGTH: 234 words

DATELINE: VIENNA and WARSAW


OMV, the Austrian oil company, is interested in buying 18 per cent of Poland's
PKN Orlen and will ask shareholders to approve a capital increase this week to
fund it.

If successful, the sale would mark the biggest step yet in a proposed defensive
alliance of central European oil companies.

Wolfgang Ruttenstorfer, OMV's deputy chief executive, confirmed yesterday his
company will ask shareholders for a capital increase on Wednesday sufficient to
cover the cost of buying the PKN shares, now held by the Polish state.

He did not disclose the amount, but PKN's current share price would value the
stake at at least Dollars 350m.

Poland has not formally announced a tender for the PKN tranche. Mr Ruttenstorfer
cautioned that no timing has been set for a rights issue by the Austrian
company, and the proposed sale is nowhere near closing and may go to another
bidder.

But Aldona Kamela-Sowinska, Poland's treasury minister, favours a strategic sale
and OMV is the only serious bidder for the stake, sources close to the
government said.

PKN is Poland's largest company and post-communist central Europe's largest oil
concern, with 25.4bn zlotys (Dollars 6.3bn) in revenues last year,
three-quarters of Polish refining and a 40 per cent share of its retail petrol
market.

OMV's share price has risen sharply in recent days, but market rumours in Vienna
had linked the jump to a recent oil find in Libya.

LOAD-DATE: May 20, 2001

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                        Financial Times (London,England)

                              May 18, 2001 Friday
                                London Edition 1

US plans to boost energy production

BYLINE: By NANCY DUNNE and STEPHEN FIDLER

SECTION: FRONT PAGE - FIRST SECTION ; Pg. 1

LENGTH: 266 words

DATELINE: WASHINGTON


George W. Bush yesterday unveiled his long-awaited national energy plan, mixing
proposals to boost oil, gas and nuclear power production with conservation
measures in an effort to avert the threat of power cuts.

"If we fail to act, this country could face a darker future," Mr Bush said.

"If we fail to act, Americans will face more and more widespread blackouts . . .
our country will become more reliant on foreign crude oil."

The plan, which follows the recommendations of a task force led by
Vice-President Dick Cheney, attempts to address demand, supply and delivery
systems, Mr Bush said. America faced the most serious energy shortage since the
oil embargoes of the 1970s, the plan warned.

Mr Bush said the proposals would use technology to increase efficiency and curb
demand; expand and diversify sources of energy including boosting nuclear power;
and modernise distribution networks to provide the energy where it was needed.

"Diversity is important not only for energy security but also for national
security. Over-dependence on any one source of energy, especially a foreign
source, leaves us vulnerable to price shocks, supply interruptions and, in the
worst case, blackmail," he told an audience of business leaders in St Paul,
Minnesota.

The task force avoided the question of whether US sanctions should be relaxed
against states such as Libya and Iran. It proposed instead a review of sanctions
by the Commerce, State and Treasury departments. "Energy security should be
considered in such a review," the report said. Reaction, Page 8 Editorial
Comment and analysis, Page 16

LOAD-DATE: May 17, 2001

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                        Financial Times (London,England)

                              May 18, 2001 Friday
                                London Edition 1

White House to review oil sanctions

BYLINE: By DAVID BUCHAN

SECTION: THE AMERICAS ; Pg. 8

LENGTH: 351 words


The White House energy task force yesterday called for a review of foreign
sanctions to "minimise their costs on US citizens and interests", but stopped
short of calling for an easing of unilateral US bans on Iran, Libya or Iraq.

Several US oil company leaders had lobbied Vice-President Dick Cheney, who had
been one of their number as head until last year of Halliburton, the world's
largest oil services company, to relax unilateral sanctions. Such sanctions
merely handicapped US companies compared with their foreign rivals, they argued.

But because of the sensitivity of this issue, the task force, chaired by Mr
Cheney, confined itself to calling for a general review of sanctions, both
unilaterally by the US as on Iran and Libya and in conjunction with the United
Nations as on Iraq. Energy security, in terms of the US gaining adequate
supplies, should be considered in this review, the report said.

As a holding action, pending this review, President Bush recently renewed for
another year a US executive order banning US oil company investment in Iran.
This order dated from 1995, when the previous Clinton administration blocked
Conoco from carrying out a contract in Iran. Conoco has since been an outspoken
opponent of unilateral sanctions.

Of the task force's 105 recommendations, 25 concerned foreign initiatives,
designed mainly to foster co-operation with energy producing states in the
western hemisphere, the Middle East and central Asia. The report called for more
gas and power links with Canada and Mexico, and for negotiations on an
investment treaty with Venezuela and for energy consultations with Brazil.

It said commercial conditions should be fostered to give oil companies operating
in Kazakhstan the option of shipping crude through the US-backed Caspian
pipeline across Azerbaijan to Turkey. Chevron has a big operation in Kazakhstan.
The report also welcomed initiatives by Saudi Arabia, Kuwait, Algeria and United
Arab Emirates to allow foreign investors back into their energy sectors.
ExxonMobil is believed to be poised to win some big gas contracts in Saudi
Arabia.

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                        Financial Times (London,England)

                              May 18, 2001 Friday
                                London Edition 1

Heat and light: The Cheney task force has proposed wide-ranging remedies for the
US energy crisis. But, argue David Buchan and Nancy Dunne, some of the problems
identified may be exaggerated:

BYLINE: By DAVID BUCHAN and NANCY DUNNE

SECTION: COMMENT & ANALYSIS ; Pg. 16

LENGTH: 1361 words


President George Bush yesterday called on Americans to meet their "most serious
energy crisis since the oil embargoes of the 1970s". He proposed a vast array of
remedies, some of them radical - such as a federal role in creating a national
electricity grid and the first rethink of nuclear power for a quarter-century.

Perhaps inevitably, there is hype as well as reality in the way the Bush
administration has outlined both the problem and the solution.

Rising energy prices hardly constitute a big crisis. In nominal terms, the
average petrol price reached a record Dollars 1.713 (Pounds 1.20) a gallon last
week before it began sliding this week. But in real terms, the peak was below
the levels of the 1970s.

The problem of paying more at the pump or for home heating pales, however,
beside the economic disruption and social hardship caused by the persistent
electricity blackouts seen in California, which are predicted to spread soon to
other areas including New York.

Such localised energy crises are the result of inadequate transmission
facilities and refining capacity. According to the administration's energy plan,
produced by a task force headed by Vice-President Dick Cheney, US oil
consumption will increase by 33 per cent, natural gas consumption by more than
50 per cent and demand for electricity by 45 per cent by 2020.

These increases, even with the administration's energy conservation proposals,
far exceed current production. "As important as conservation is, it doesn't
close the gap between supply and demand," says Mr Cheney.

The Cheney task force report claims: "Our energy crisis has been years in the
making and will take years to put fully behind us." But the very scope of the
163 pages, with 105 recommendations, 12 executive orders, 73 directives to
federal agencies and 20 proposals for Congressional action, will undoubtedly
lead to exaggerated expectations of swift action.

Many directives to agencies are only requests for studies. One or two, such as
the presidential order to all agencies to try to curb their energy usage, could
have a wide, but inevitably slow, impact. None of them are instant solutions.

California's electricity woes and high petrol prices lend momentum to Mr Bush's
message of crisis. But Phil Clapp of the National Environmental Trust, an
independent Washington-based group, notes the report offers nothing for
California's problems. "The energy message to California is: 'Drop dead'," he
says.

There is irony in the proposal by an inherently laisser faire Republican
administration to expand the federal government's role in the US energy market.
While in theory many Democrats might not object, in practice the bias of federal
intervention towards relaxing environmental restrictions will inevitably stiffen
opposition.

"The challenge will be to get a bipartisan consensus (on the energy plan)", says
Robin West of Petroleum Finance, a leading Washington consultancy. "The
Republicans are very concerned about the political dangers of being blamed for
high energy prices and blackouts and the Democrats are very excited by the
political opportunities of this - it's their first big one since the election."

Kim Wallace, energy analyst at Lehman Brothers, says it is hard to tell whether
the administration is "going through the motions as a form of political cover or
is earnestly interested in making new law".

Because so much of the Cheney report was leaked ahead of yesterday's
announcement, the least surprising element was the proposal to expand drilling
on federal land. This included the proposal to open 8 per cent of Alaska's
Arctic National Wildlife Refuge to exploratory drilling, as well as to expand
operations in the Naval Petroleum Reserve, an area of Alaska long ago set aside
for a navy that now runs many of its ships on nuclear power. It also suggests
building, in conjunction with Canada, a pipeline to bring Alaskan gas to the
lower 48 US states, a proposal that has drawn little opposition from US
environmental groups.

In the western part of the 48 states, where the federal government is the
biggest single landowner, the administration proposes easing restrictions on oil
and gas drilling.

But even with increased drilling, natural gas production is likely to fall far
behind rapidly growing demand. As a result, the administration is pushing
diversification.

The main alternative energy source is coal, which generates about half of US
energy supply. With 250 years-worth of reserves, it is America's most plentiful
- but most polluting - energy resource. The administration wants to maintain
this share by cleaner coal-burning technology, on which it proposes to spend
Dollars 2bn during the next decade.

One of the plan's most controversial proposals is its support for nuclear power,
a sector that still generates 20 per cent of the nation's electricity - and 40
per cent in 10 north-eastern states - despite heavy official constraints. No new
operating permits have been granted for nuclear plants since the 1979 accident
at Three Mile Island. But the nuclear industry expects permission this year for
construction of at least one nuclear plant, an industry representative said
yesterday.

Mr Cheney claims "people are much more rational" about nuclear power now. In
that belief, his report proposes speedier re-licensing of existing reactors and
approval of any new ones, tax breaks for buying nuclear plants and an extension
of federal-backed insurance against nuclear accidents.

In what may be a historic reversal in dealing with nuclear waste, the
administration is even studying a return to reprocessing spent uranium.
President Jimmy Carter abandoned reprocessing in the late 1970s on the grounds
that such a process - which produces weapons-grade plutonium - set a dangerous
example and that, in any case, uranium was cheap enough not to have to recycle
it.

These factors probably still hold. But the readiness of the administration to
study reprocessing shows it is serious about dealing with the nuclear waste
problem.

To blunt the expected environmentalist attack on its package, the administration
has stressed that of its 105 recommendations, 42 bear on conservation and
renewable energy. Some of these were rejected by Republicans in Congress, when
they were proposed by President Bill Clinton. Congress refused to allow the
Clinton administration to raise fuel economy standards in new cars.

Fuel efficiency standards have saved a lot of petrol since they were introduced
in the mid-1970s. But they have not been raised for some years. If they were,
the Bush administration might find there was more petrol to be "discovered" in
the nation's car tanks than in Alaska.

Politically, the administration's trickiest task will be to give some national
dimension to the country's fragmented and inadequate infrastructure. It will
mainly have to confine itself to exhortation. States and local communities are
to be urged to drop their various petrol standards; these standards, imposed in
the name of cleaner local air, complicate distribution. States will also be
urged to allow new refineries.

In one area, the Bush administration considers a more forceful decision - to
give the federal government the same right to locate electricity transmission
lines as it has over gas pipelines. Patchwork deregulation has left the country
with a fragmented, incomplete power grid.

Such a right of "eminent domain" to acquire property for power pylons would only
be a "last resort" but an essential one, the Edison Electrical Institute said
yesterday. The institute calculates the next decade will require 30,000 miles of
new power lines, of which only 7,600 are on the drawing board. But it will be
far harder to establish a national grid today than it was, say, to build
railways across 19th-century America.

The Cheney plan ranges beyond domestic energy to propose greater hemispheric
co-operation with Canada and Mexico. It also proposes a general review of
unilateral US sanctions that shut US companies out of countries such as Iran and
Libya. But it failed to make a firm recommendation. Having tackled so many other
difficult issues, its courage failed it here.

LOAD-DATE: May 17, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


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                             1127 of 2746 DOCUMENTS


                        Financial Times (London,England)

                              May 14, 2001 Monday
                                 USA Edition 2

Policy creep

SECTION: LEADER ; Pg. 10

LENGTH: 412 words


Securities market regulation does not often have much to do with foreign policy.
Yet in the US the two have recently become awkwardly interlinked.

US companies are forbidden to do business with a certain group of countries
under embargo, including Iran, Iraq, Libya, Sudan, North Korea, Burma and China.
Now, the Securities and Exchange Commission plans to require foreign companies
listing in the US to disclose their business interests in those countries.

According to the SEC, this action is justified on the grounds that such dealings
are "likely to be significant to a reasonable investor's decision about whether
to invest in that company".

The argument is that just as the potential costs of environmental damage, or a
lawsuit, should be revealed to investors, so should the potential costs of doing
business with a pariah state.

Most obviously, this means the risk that the US may extend the reach of its
sanctions policy to touch foreign firms, as it has already done in a limited way
with the Iran-Libya Sanctions Act. In addition, more arguably, the company could
be the subject of a backlash, in Congress or among the general public, that
could affect its share price.

There is some logic in this. But it is hard to see the SEC's policy change as
anything but politically motivated. It came in response to a congressional
report that explicitly pushed the idea of using the financial markets as a way
of making sanctions work, particularly with regard to companies doing business
in Sudan.

It is also regrettable that the new policy emphasis leaked out via a letter to a
congressman, rather than being publicly announced.

The affair highlights the inconsistencies in US sanctions policy. Sanctions are,
at best, a blunt policy tool. At worst, they do far more harm to the ordinary
people of a country than to its leader.

Some of the countries on the US list, such as Cuba, are there largely for
domestic political reasons, rather than because their regimes are particularly
reprehensible.

In other cases, such as that of Iran, the US has been slow to change its policy
to reflect the progress that has taken place. Given these problems, Congress's
determination to make the sanctions more broad-ranging appears even less
justified.

So far, the SEC is demanding only greater disclosure and is not threatening to
deny listings to companies doing business with the countries concerned. But the
creep of foreign policy into market regulation should go no further.

LOAD-DATE: May 13, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


                   Copyright 2001 The Financial Times Limited


                             1128 of 2746 DOCUMENTS


                        Financial Times (London,England)

                              May 11, 2001 Friday
                                 USA Edition 1

SEC seeks closer watch on overseas groups

BYLINE: By EDWARD ALDEN

SECTION: FRONT PAGE - COMPANIES & MARKETS ; Pg. 1

LENGTH: 481 words

DATELINE: WASHINGTON


The US Securities and Exchange Commission is planning to demand sharply
increased disclosure from overseas companies listed in the US that are doing
business with countries under US embargo.

The decision, which could be overturned by Harvey Pitt, whom the Bush
administration plans to nominate as SEC chairman, marks an unprecedented mixing
of capital markets regulation with US foreign policy concerns.

It is spelt out in a May 8 letter from Laura Unger, acting SEC chairman, to
Frank Wolf, the Republican who chairs the House of Representatives
appropriations subcommittee responsible for the SEC.

In the letter, obtained by the Financial Times, Ms Unger says the SEC will now
require overseas companies to disclose if they are doing business in any country
where US companies would be prohibited from investing. These include Iran, Iraq,
Libya, Sudan, North Korea, Burma and Cuba.

The embargo also embraces companies targeted for weapons proliferation.

Ms Unger wrote: "Our aim is to make available to investors additional
information about situations in which the material proceeds of an offering could
- however indirectly - benefit countries, governments, or entities that, as a
matter of US foreign policy, are off-limits to US companies."

The commitments are spelt out as initiatives to be carried out by the SEC staff,
and are accompanied by a detailed staff memorandum. Except for a small change
requiring electronic filing by overseas companies, the move does not demand a
formal rule but can be implemented under existing SEC authority.

The SEC action responds to a growing campaign by human rights groups aimed at
restricting the ability of companies doing business in war-racked Sudan to raise
money on US markets.

Mr Wolf demanded last month that the SEC suspend trading in the stock of
PetroChina and Talisman Energy, the Chinese and Canadian oil companies.
PetroChina's parent company is the largest investor in a consortium extracting
oil in Sudan. Talisman holds a smaller share.

Mr Wolf claimed both com-panies had failed to disclose to investors the risks of
their involvement in Sudan.

Ms Unger said the SEC had no authority to deny US listings because of a
company's involvement with any particular foreign country, but would require
fuller disclosure of these investments.

The SEC, which normally does only selective reviews of disclosure filings, said
it would attempt to review all registration statements filed by overseas
companies with business in embargoed countries.

The SEC would work closely on the issue with the Office of Foreign Assets
Control, the Treasury agency that administers US economic sanctions. The SEC
"fully supports duly imposed economic sanctions and will co-operate with
appropriate US governmental agencies to help ensure that those sanctions are
enforced," the letter said. Pitt set to head SEC, Page 19
www.ft.com/globaleconomy

LOAD-DATE: May 10, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


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                             1129 of 2746 DOCUMENTS


                        Financial Times (London,England)

                              May 11, 2001 Friday
                                 USA Edition 1

SEC chief inherits disclosure bombshell CAPITAL MARKETS WATCHDOG'S EXPANDED ROLE
MAY CAUSE SEA CHANGE IN THE WAY FOREIGN COMPANIES LIST IN US:

BYLINE: By EDWARD ALDEN

SECTION: US AND CANADA ; Pg. 4

LENGTH: 828 words

DATELINE: WASHINGTON


Laura Unger, the acting chairman of the US Securities and Exchange Commission,
has handed a bombshell to her successor Harvey L. Pitt.

Mr Pitt, who was nominated yesterday by President George W. Bush to head the
SEC, will be given the task of implementing a decision that significantly
expands the SEC's role in ensuring that foreign companies listing in the US do
not run foul of US sanctions policy.

The decision was conveyed in a letter this week from Ms Unger to Rep. Frank
Wolf, who chairs the House appropriations subcommittee with authority over the
SEC and is co-chair of the House human rights caucus.

The SEC, under its existing authority to require full disclosure, has declared
that investments in countries under US sanctions are a significant material risk
to investors.

While the US government has never been shy about using sanctions as a foreign
policy tool, there has been great reluctance, particularly from the US Treasury,
to link these measures in any way to the US capital markets. The fear is that
companies could choose to list elsewhere if they believe US markets are tainted
by political considerations.

The SEC's move "could represent a sea change in the way in which foreign
registrants access the US capital markets", said Roger W Robinson Jr, chairman
of the William J Casey Institute, a Washington policy group with close ties to
conservative groups and human rights activists.

"National security, human rights and religious freedom concerns are now regarded
as potential material risks to investors," said Mr Robinson, who was a senior
National Security Council official in the Reagan administration.

While companies are already required in general terms to disclose political
risks, the new requirements are much more targeted. US-listed companies must now
spell out their dealings in places such as Iran, Iraq, Libya, Sudan, Burma and
Cuba, and the SEC has promised aggressive oversight to ensure that US investors
are fully aware of the risks they are taking in buying stocks or bonds in such
companies.

In a background memorandum from David Martin, the director of corporate finance,
the SEC says that such risks are not limited to the possibility that US
sanctions could directly hurt the company.

In addition, "if it is reasonably likely that public opposition to the company
would have a materially adverse effect on the operations of the company, this
risk would also need to be disclosed".

The decision is a big victory for human rights groups that have been trying to
influence share prices by urging investors to avoid companies doing business in
countries that violate human rights or religious freedoms. In effect, the SEC
has said that the campaigns are hurt ing the stock prices of controversial
companies.

The US focus has been on Sudan, where an 18-year civil war has claimed more than
2m lives. Mr Wolf has urged that PetroChina and Talisman Energy, two of the
companies involved in developing the Sudanese oil fields, be barred from trading
in the US.

The campaign scored its biggest success last year when it put pressure on public
pension funds and other investors to boycott a New York share offering by
PetroChina. The offering eventually yielded Dollars 2.9bn, a fraction of the
Dollars 10bn the company had been seeking.

Sudan activists, with the Casey Institute doing the research legwork, have also
been calling for broader restrictions on the ability of these companies to raise
funds in the US.

However, Ms Unger said in the letter that she had no authority to take such a
drastic step. But she said "we take very seriously" the charge made by Mr Wolf
that the two companies "may have failed to disclose material information" with
respect to their operations in Sudan. She would not say whether the two
companies are under investigation, but said the matter had been referred to the
SEC's enforcement division.

While the pressure has been focused on Sudan, Ms Unger's decision will have much
broader ramifications. Many foreign companies listing in the US, particularly
energy companies, have operations in countries under US embargo and will be
affected by the new requirements. The disclosure requirement affects any company
or entity that is covered by sanctions administered by the Treasury's Office of
Foreign Assets Control.

One foreign securities regulator said the decision is a significant departure
that introduces expanded political criteria into securities disclosure, on the
grounds that it might affect share value. He said it would lead to lobbying for
further measures by the SEC to demand additional disclosure on environmental or
broader human rights grounds.

The decision will also put new pressure on mutual funds and pension funds to
expand their assessments of the political risks of investing in certain
companies. While some funds already eschew these companies on ethical grounds,
the SEC's decision is a clear statement that the investments could pose a
financial risk as well.

LOAD-DATE: May 10, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


                   Copyright 2001 The Financial Times Limited


                             1130 of 2746 DOCUMENTS


                        Financial Times (London,England)

                              May 11, 2001 Friday
                                London Edition 3

SEC plans to tighten rules on embargoes

BYLINE: By EDWARD ALDEN and JOHN LABATE

SECTION: THE AMERICAS ; Pg. 13

LENGTH: 570 words

DATELINE: WASHINGTON and NEW YORK


The US Securities and Exchange Commission is planning to demand sharply
increased disclosure from foreign companies listed in the US that are doing
business with countries under US embargo.

The decision - which could yet be overturned by Harvey Pitt, whom the Bush
administration plans to nominate as SEC chairman - marks an unprecedented mixing
of capital markets regulation with US foreign policy concerns.

It is spelt out in a May 8 letter from Laura Unger, acting SEC chairman, to
Frank Wolf, the Republican who chairs the House of Representatives
appropriations subcommittee responsible for the SEC.

In the letter, obtained by the Financial Times, Ms Unger says the SEC will now
require foreign companies to disclose if they are doing business in any country
where US companies would be prohibited from investing.

These include Iran, Iraq, Libya, Sudan, North Korea, Burma and Cuba as well as
some specific companies targeted for weapons proliferation.

"Our aim is to make available to investors additional information about
situations in which the material proceeds of an offering could - however
indirectly - benefit countries, governments or entities that, as a matter of US
foreign policy, are off-limits to US companies," Ms Unger wrote.

The commitments are spelt out as initiatives to be carried out by the SEC staff,
and are accompanied by a detailed staff memorandum. Except for a small change
requiring electronic filing by foreign companies, the move does not demand a
formal rule but can be implemented under existing SEC authority.

The SEC action responds to a growing campaign by human rights groups aimed at
restricting the ability of companies doing business in war-racked Sudan to raise
money on US markets.

Mr Wolf demanded last month the SEC suspend trading in the stock of PetroChina
and Talisman Energy, the Chinese and Canadian oil companies. PetroChina's parent
company is the largest investor in a consortium extracting oil in Sudan while
Talisman holds a smaller share.

Mr Wolf claimed both companies failed to disclose to investors the risks of
their involvement in Sudan.

Ms Unger said the SEC had no authority to deny US listings because of a
company's involvement with any particular foreign country but would henceforth
require fuller disclosure of these investments.

The SEC also said it would attempt to review all registration statements filed
by foreign companies which have business in embargoed countries.

Bush nominates securities lawyer as successor to Levitt

President George W. Bush yesterday named securities lawyer Harvey L. Pitt to
head the US Securities and Exchange Commission after one of the administration's
longest searches yet to fill a key post, John Labate writes from New York.

If approved by the Senate, Mr Pitt would replace Arthur Levitt, who stepped down
as chairman in February after more than eight years.

Mr Pitt, a partner at New York-based law firm Fried, Frank, Harris, Shriver &
Jacobson, is widely regarded as one of the country's leading experts on
securities law and one of its toughest litigators.

His long list of clients have included Ivan Boesky, for whom in 1986 he
negotiated a Dollars 100m settlement with SEC officials on insider trading
charges. Others include Lloyd's of London, the New York Stock Exchange, and all
"big five" accounting firms.

The move would return Mr Pitt, 56, to the SEC, where he worked for a decade
after law school.

LOAD-DATE: May 10, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


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                             1131 of 2746 DOCUMENTS


                        Financial Times (London,England)

                             May 10, 2001 Thursday
                                London Edition 1

Double standard

SECTION: COMMENT & ANALYSIS ; Pg. 20

LENGTH: 412 words


The US has suffered a grievous diplomatic defeat with the loss of its seat on
the United Nations Human Rights Commission. For more than 50 years, ever since
Eleanor Roosevelt helped create the body, the commission has spotlighted abuses.
When it has spoken up, the US has been supportive.

Americans are not the only ones asking why countries such as Libya, Pakistan and
Sudan are judged to be better qualified to sit on the commission. The US may
have been complacent ahead of last week's secret vote but this does not justify
a result of breathtaking double standards.

Some have excused voting off the US as a necessary come-uppance. Thus China,
backed by fellow members Cuba, Libya and Vietnam, mobilised discontent over
Washington's opposition to the Kyoto Protocol on climate change, the
International Criminal Court and the Ottawa treaty on landmines. Others point to
disagreement with the Bush administration's plans to build a missile defence
shield and in effect scrap the 1972 Anti-Ballistic Missile treaty.

The Bush team insists it intends to stick to a hard-headed pursuit of the
national interest. Multilateralism is not a good in itself, as a senior US
official told the FT this week. However, officials admit that high-handedness
risks triggering resentment among potential adversaries such as China as well as
allies in Europe.

The administration and the US Congress should not respond to the UN vote by
withholding back dues or taking other punitive action. This would simply invite
retaliation. It would also hand another gift to countries with dubious human
rights records. They have every interest in turning the commission into a
talking shop.

The administration should instead pursue constructive engagement on commission
issues. This could include support for resolutions supporting lower-cost access
to HIV/Aids drugs, especially now that big pharmaceutical companies recognise
they have a case to answer.

There are also lessons for US allies. The three seats allocated to western
countries went to three members of the European Union: France, Sweden and
Austria (whose coalition government was ostracised last year by other EU
governments for including Jorg Haider's rightwing Freedom party). So much for
consistency.

The EU should work to ensure that the US is voted back on the panel next year.
Whatever the present strains, there is more to unite than divide America and
Europe. Especially when it comes to democratic values and human rights.

LOAD-DATE: May 9, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


                   Copyright 2001 The Financial Times Limited


                             1132 of 2746 DOCUMENTS


                        Financial Times (London,England)

                             May 9, 2001 Wednesday
                                  Surveys EGY1

Hard scene on screen as new firm reels into action: THE FILM INDUSTRY by Roula
Khalaf: A new operator using Wall Street-style tactics is upsetting traditional
film-makers

BYLINE: By ROULA KHALAF

SECTION: SURVEY - EGYPT ; Pg. 9

LENGTH: 793 words


Youssef Chahine, Egypt's award-winning film director, is seething with anger.
Much of it directed against the Egyptian regime, whose authoritarianism, he
complains, has stifled creativity in an industry that was once the best Egyptian
export in the Arab world.

"The industry's main product is talent, the human being, but the will of the
human being has been sapped by emergency rule, by the lack of transparency, by a
bureaucracy so heavy and totally rotten," he says.

"If artists turn cowards because of the heavy pressure, I think it hurts and
they cannot create."

But the country's famous artist, who has sought to break taboos by tackling
sensitive political subjects and has been attacked by both the regime and its
Islamist opponents, is also frustrated by a more practical and immediate
headache.

A new company with vast financial resources has entered Egypt's film industry in
the past year and expanded so rapidly that it has left smaller production
companies, including the one owned by Mr Chahine, shell-shocked.

"We have a big problem now, a company that comes in and knows nothing," says Mr
Chahine. "We don't want it to dominate the market."

The company is Fonoun, the Arab arts and publishing company. It is the
brainchild of Ahmad Heikal, co-founder of a local investment bank whose imported
aggressive Wall Street tactics have ruffled feathers in a country where
"businessmen" are still viewed with suspicion.

Billed as the Time Warner of the Middle East, and armed with an Dollars 450m
investment capital gathered from Arab investors, Fonoun in the last 12 months
has bought up 30 per cent of screens in Egypt, and theatres elsewhere in the
Arab world as well as a large chunk of old Egyptian films.

In film industry circles, the word is that Fonoun has already offered a hefty
sum for Mr Chahine's company but that he is refusing to sell.

The company's reach is extending to production and it expects to make 12 films
this year. Its ambitions stretch well beyond cinema, and it has already
purchased a good part of the Arab world's top book publishing houses and music
labels.

Salim Farid, a prominent film critic, says Fonoun is exactly what the Egypt's
troubled film industry needs. Production has fallen from a high of 100 films a
year several decades ago to 25 a year recently. "It is helping to revive the
industry," he says. "We always complained that there isn't big capital in
cinema."

But as it seeks to digest one acquisition after another, Fonoun has stirred huge
controversy, with accusations of monopolising the market and complaints over a
lack of transparency.

The Egyptian press has gone on a crusade to tarnish the company's image, raising
alarm over a main backer's shadowy background. Last month, the campaign against
Fonoun gained further momentum as the company's president quit and later hinted
in an interview with Rose al-Youssef, a local magazine, that he had disagreed
with some decisions and that shareholders were interfering in management.

Critics in the business community, meanwhile charge that Fonoun and its
dominance by an investment bank that has no experience in the industry, has been
over-ambitious and should stick to distribution and leave production for others.

The company's strategy rests on expectations that it can tackle the impediments
to both film and music expansion in Egypt. The film industry's demise is blamed
on the limited number of theatres and the closure of Arab markets that were once
a valuable outlet.

Mr Farid says when the main outlets for Egyptian films became satellite and
cable television in the Arab world, stations bought cheap rights to old films
and had little incentive to pay more for new productions.

"Films became so cheap outside and so expensive to produce inside, so production
went down," he explains.

"At the same time, the Algerian market, where there was the highest number of
cinemas, was shut because of war; Libya prohibited the import of Egyptian films;
and Sudan got an Islamist government."

Stung by controversy, Fonoun officials are keeping a low profile but people
close to the company say the focus is on building distribution channels as well
as improving the quality of new films.

The same applies for the music industry, where Fonoun has already signed
money-making deals with supermarkets to distribute its labels; and music
distribution by telephone - whereby Arabs dial a number and request a song.

At the same time, the company is betting on a gradual erosion of piracy as Egypt
is pushed to embrace World Trade Organisation rules on intellectual property
rights.

"We sell 2,500 videos of a film but numbers on the market can reach 20,000,"
says Gaby Khouri, Mr Chahine's partner. "And we're not protected elsewhere in
the Arab world."

LOAD-DATE: May 8, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


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                             1133 of 2746 DOCUMENTS


                        Financial Times (London,England)

                             May 9, 2001 Wednesday
                                  Surveys EGY1

State re-energised by offshore finds: GAS by Heba Saleh: Large reserves in the
Nile delta throw a lifeline to an economy with a growing appetite for both
energy and overseas earnings

BYLINE: By HEBA SALEH

SECTION: SURVEY - EGYPT ; Pg. 9

LENGTH: 802 words


With three agreements for Liquified Natural Gas (LNG) plants and a potential
fourth in the pipeline, Egypt appears poised to become a significant gas
exporter to markets in the Mediterranean and possibly as far as the US.

The agreements rely on supplies from what is described as a "world class gas
province" in the Nile Delta and its offshore waters.

Sameh Fahmy, the Egyptian oil minister puts his country's proven reserves at 51
trillion cubic feet, with another 69 trillion cubic feet of probable reserves.

It may not be in the same league as Qatar or Iran, but Mr Fahmy says Egypt has
enough gas to allow it to export a third of its reserves, use another third to
meet domestic demand for 25 years and save the final third for future
generations.

With declining oil production, and predictions that Egypt would soon become a
net importer of oil, the discovery of natural gas in large quantities is a
lifeline to a state struggling to meet the needs of a fast-expanding population.

"The key story of the Egyptian industry is the transformation from oil to gas,"
says one industry executive. "Total production of hydrocarbons is higher than it
has ever been."

At home, the government is pushing for industry, residential consumers, power
stations and even vehicles to convert to gas.

Both Shell and BG, the international oil and gas groups, are involved in
expanding the local market through distribution joint ventures, which lay down
infrastructure and market gas to areas where it had not been available.

But the domestic market is likely to remain oversupplied in the coming years,
making export the logical next step for big companies working in Egypt.The first
LNG deal was clinched by Union Fenosa, the Spanish utility company. The company
plans to invest Dollars 1.6bn in an LNG plant to export gas to fuel its power
stations in Spain.

Despite regional competition from Algeria, Libya and Qatar, oil executives say
there is a gas deficit in the already-developed markets of Europe and the US,
providing an opportunity for export schemes that promise to come to market in
the next two or three years.

"Egypt has a wonderful opportunity now to capitalise on significant reserves. If
we miss it, the competition will jump in," says Peter Dranfield president of BG
Egypt, which with Edison International, signed an LNG deal in April.

"There are attractive markets in Southern Europe and the US. Once they have been
supplied that opportunity goes away for 20 years."

BG envisiges turning Idku, east of Alexandria, into one of five gas hubs it is
developing around the world. It also aims to turn itself into an integrated
company delivering gas directly to customers.

The Dollars 900m LNG plant will use the significant uncommitted reserves that BG
has in the offshore West Delta Deep Marine concession.

This concession boasts the largest gas finds ever made in Egypt. BG and Edison
are developing the field at a cost of Dollars 600m.

The first LNG sales are expected in 2005.

In March BP, the oil giant, and its Italian partner, ENI, agreed with the
Egyptian General Petroleum Organization, EGPC, the commercial terms for their
LNG venture. Total investment will be at least Dollars 1.5bn.

BP is already an important gas producer in Egypt, but supplies for the LNG plant
will be bought from EGPC.

A company executive says BP is so confident of its ability to market Egyptian
gas that it need not wait until it has fixed every step of the way from upstream
to burn up.

BP and ENI will buy the LNG produced by the facility for sale in Mediterranean
markets from the second half of 2004.

Shell is another big oil company negotiating its own gas venture. It proposes to
combine an LNG train with a Gas-To-Liquids plant at a cost of Dollars 1.8bn. The
company operates exploration and production concessions around Egypt, but its
most adventurous work is being carried out in the vast Northeast Mediterranean
Deep Water Block, Nemed.

With water depths ranging from 800 metres to 2,800 metres and an area of
41,500kms sq Nemed is real frontier exploration.

Shell executives have been bullish about oil and gas prospects there, comparing
it to prolific deltas in the Gulf of Mexico and Nigeria. The company has already
drilled two exploration wells in Nemed but has postponed announcing results,
triggering reports in March that they were disappointing.

The oil minister has denied that Shell has hit dry holes and said that one of
wells proved that the Delta gas play extended into the block 120km off the
Egyptian coast. He said a full analysis is still awaited.

The results of Nemed are important because so far most of the oil and gas found
in Egypt and the eastern Mediterranean has been in shallow waters.

If the promise Shell perceives in Nemed is realised, it could open up a new
horizon for the region.

LOAD-DATE: May 8, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


                   Copyright 2001 The Financial Times Limited


                             1134 of 2746 DOCUMENTS


                        Financial Times (London,England)

                               May 7, 2001 Monday
                                London Edition 1

Ivanov begins Libya visit NEWS DIGEST

BYLINE: By ROBERT COTTRELL

SECTION: MIDDLE EAST, AFRICA & AMERICAS ; Pg. 8

LENGTH: 73 words

DATELINE: MOSCOW


Ivanov begins Libya visit

Russia's foreign minister, Igor Ivanov, began a two-day visit to Libya yesterday
expected to include talks with the Libyan leader, Muammer Gadaffi, about a
possible summit with President Vladimir Putin. Russia and Libya have already
agreed in principle on the need for a summit "to open up new horizons for our
co-operation", said Vasiliy Sredin, a Russian Foreign Ministry official. Robert
Cottrell, Moscow

LOAD-DATE: May 6, 2001

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Newspaper


                   Copyright 2001 The Financial Times Limited


                             1135 of 2746 DOCUMENTS


                        Financial Times (London,England)

                              May 5, 2001 Saturday
                                London Edition 1

Rift grows between Washington and UN HUMAN RIGHTS COMMISSION US LOSS OF SEAT
PROMPTS MOVES THAT COULD DERAIL PAYMENT OF ARREARS OWED TO ORGANISATION:

BYLINE: By CAROLA HOYOS and MICHAEL LITTLEJOHNS

SECTION: THE AMERICAS ; Pg. 8

LENGTH: 527 words

DATELINE: WASHINGTON and NEW YORK


Members of US Congress yesterday reacted swiftly to the loss of the US seat on
the United Nations Human Rights Commission, calling for hearings that could
derail Washington's payment of Dollars 582m (Pounds 404m) in UN arrears.

Wednesday's vote for members of the 53-nation commission threatens to exacerbate
further the already strained relations between the new Bush administration and
the UN and its members.

Washington risks angering European countries, especially if it reneges on its
promise to repay its UN debts. European countries last December agreed
reluctantly to shoulder more of the burden of funding the UN in return for
Washington paying the Dollars 582m, only a portion of the Dollars 1.7m in
arrears the UN says the US owes the organisation.

Thursday's vote has given hawkish members of Congress, many of whom resent the
UN's existence, some of the most powerful ammunition in years with which to
attack the world organisation, diplomats said.

Reacting to the vote, Congresswoman Ileana Ros-Lehtinen, a Florida Republican
and chair of the subcommittee on international operations and human rights,
said: "It's a travesty that undermines the integrity and legitimacy of the
United Nations system where we have human rights violators such as Libya, Cuba
and China as semi-permanent members of the Commission," adding: "The US Congress
will study this situation carefully."

The US State Department also voiced dismay, saying: "Our commitment and resolve
to address the human rights problems around the world is a matter of US policy
and it will not be affected by this vote."

But it is the US attitude to human rights that many believe was the reason
Washington lost its seat, which it had held since 1947.

The outcome is being portrayed by many in Washington and the UN as a rebuff to
US toughness on human rights, especially relating to China and Cuba.

Representative Henry Hyde, Republican from Illinois and chairman of the House
International Relations Committee said: "This appears to be a deliberate attempt
to punish the US for its insistence that the commission tell the truth about
human rights abuses wherever they occur. The decision may have the unfortunate
result of turning the Human Rights Commission into just another irrelevant
international organisation."

But a western delegate who follows rights matters closely insisted this was a
misrepresentation. Sweden is tougher, yet was elected, the diplomat noted -
albeit by only three votes more than the 29 the US received.

Delegates mentioned repeated US vetoes on UN Security Council resolutions aimed
at protecting Palestinians under Israel's occupation, and a willingness to look
the other way when a grievous violation occurred in America's own backyard - as
long as it was not Cuba.

The vote was also seen as a backlash to President George W. Bush's general
dismissiveness of the UN and his retreat from the Kyoto protocol and other
multilateral agreements.

Virtually every delegate who volunteered an opinion yesterday hoped the incident
would serve as a wake-up call to the Bush administration to become more engaged
with the world body and with multilateralism in general.

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                        Financial Times (London,England)

                              May 5, 2001 Saturday
                                  Surveys WUS1

Semantics that set evil in motion TELEVISION EUNY HONG-KORAL:

BYLINE: By EUNY HONG-KORAL

SECTION: WEEKEND INVESTOR ; Pg. 6

LENGTH: 808 words


More devastating than Claude Lanzmann's Shoah or Elie Wiesel's Night, or any
Holocaust survivor's testimony, is the architecture and legal language of
Hitler's Final Solution itself.

The terms of the solution were hammered out over a buffet lunch at the lakeside
village of Wannsee, near Berlin, on January 20 1942.

The 15 participants left no stone unturned in defining the ins and outs of
Goering's infamous 1941 mandate to his second-in-command, SS General Reinhard
Heydrich (Goering was not present at the Wannsee meeting): "I hereby charge you
with making all necessary preparations with regard to organisational and
financial matters for bringing about a complete solution of the Jewish question
within the German sphere of influence in Europe."

Of the 30 copies made of the transcript, only one copy survived, which was
discovered in the files of the Reich Foreign Office in 1948.

Conspiracy, a new HBO production, is based on a powerful, simple idea. It
recreates the infamous meeting at Wannsee, and is based almost exclusively on
the transcript itself, dramatised in real-time: the film lasts for 90 minutes,
which is approximately the same duration as the meeting on which it is based.

There is no background score, no embellishment. Director Frank Pierson
(screenwriter for Dog Day Afternoonand Cool Hand Luke) explains his strategy to
make the audience feel like a fly on the wall at the meeting: "The camera was
never above or below eye level." (HBO, Saturday May 19 at 9pm ET.)

The men sit around the boardroom table, calligraphic name placards and water
pitchers before them, with a silent stenographer in the background.

They proceed in a laconic, no-nonsense fashion, as though they are management
consultants trying to determine how to lay off employees in the face of an
imminent corporate merger.

General Heydrich (played by Kenneth Branagh) leads the meeting. He explains that
Germany is facing the one drawback of world conquest: it continually increases
its Jewish population as it annexes neighbouring lands. "Germany acquired 2.5m
Jews when we conquered Poland, and we will get 5m more when we take Russia," he
says.

Emigration of the Jews is not a solution, because: "Who will take them? Even in
the US, as Jews are whispering in Roosevelt's ear, they turn them away."

Then, with studied rhetoric, he announces: "From Lapland to Libya, from
Vladivostok to Belfast, no Jews. Not one." It elicits an approving
table-thumping.

The next item on the agenda is an incredibly baroque discussion, meant to
clarify the sections of the Nuremberg laws that defined, in legal terms, who was
to be considered a Jew.

The Wannsee participatants agree readily enough that the "first-degree mixed"
Jews - those possessing "two or more Jewish grandparents" - must be sterilised.
Will they consent to this?

SS OberfuhrerGerhard Klopfer (played by Ian McNiece), state secretary of the
party chancellery, says:

"Why not, they've already had their cocks clipped."

The real debate is over the definition of a "second-degree mixed Jew". Heydrich
proposes that a Jew can be excepted, unless "he is Jewish-looking or sounding".

Confusion arises. One participant furrows his brow: "Are we talking about
third-degree Jews?" Heydrich attempts to elucidate, which further underscores
the absurdity of the debate: "A mixed second, third exception."

The performers convey their inner state through the subtlest of gestures. The
astonishingly versatile Colin Firth plays Dr Wilhelm Stuckart, the jurist who
co-wrote the Nuremberg laws. As the SS representatives mangle the letter of the
law he wrote, he simmers steadily, attempting vainly to interrupt, until at last
he explodes.

The ostensible topic is the Jewish question, but it becomes clear that Heydrich
has pulled off a sleight of hand. Any semblance of a democratic exchange of
ideas has been a farce. This is a power struggle, in which the SS subversively
takes control through word play and intrigue - not by screaming and banging
their shoes on the table.

These are not the caricatured, comically stentorian Nazis of a Steven Spielberg
film. On the contrary, as the actors interpret it, this meeting is a game of
steel nerves.

All the participants attempt to hide their discomfort when discussing the
efficacy of gas chambers. Heydrich mentions amusedly that one of the effects of
the carbon monoxide gas is that the bodies turn pink. At this point, General
Otto Hofmann, chief of the race and settlement, excuses himself from the table,
mumbling: "Shouldn't have mixed wine with whisky."

One participant quotes Goethe in an attempt to get his cohorts into the proper,
iron-fisted spirit of things: "Theory is grey, whereas action is green." This
programme demonstrates that quite the reverse is true: theory is a form of
action, and mere semantics are sufficient to set evil in motion.

LOAD-DATE: May 8, 2001

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                        Financial Times (London,England)

                              May 5, 2001 Saturday
                                 USA Edition 1

Desert explorer died in Trieste

BYLINE: By JOSEPH DIAMANTE

SECTION: LETTERS TO THE EDITOR ; Pg. 6

LENGTH: 68 words


From Mr Joseph Diamante.

Sir, In an article excerpted from his book, Justin Marozzi writes that "Sir
Richard Burton's expedition (in the desert) resulted in his excruciating death
from bilious fever in the central oasis of Murzuk in what is today Libya" ("A
desert odyssey", FT Weekend April 28-29).

Sir Richard died in Trieste in October 1890.

Joseph Diamante, 55 West 55th Street, New York, NY 10019, US

LOAD-DATE: May 8, 2001

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                        Financial Times (London,England)

                              May 1, 2001 Tuesday
                                London Edition 1

INTERNATIONAL ECONOMY: US confronts the need to rewrite outmoded rules on
weapons exports: Cold war-era curbs in a now global defence sector are
counter-productive on both sides of the Atlantic, writes Edward Alden:

BYLINE: By EDWARD ALDEN

SECTION: INTERNATIONAL ECONOMY ; Pg. 12

LENGTH: 840 words


For more than six months in 1999, a Swiss defence contractor beseeched the US
government to authorise the sale of componentsfor the Swiss army's M-113
armoured personnel carriers.

The fight was not over the release of the latest US military hardware or
advanced computer software. The Swiss company, instead, was asking for such
items as radiator hoses and water pumps for the commercial US diesel engines
that power the M-113s.

Under US law, however, any item redesigned for military use - however innocuous
- is considered a weapons component. The water pumps and the hoses for the M-113
are slightly modified from those used in the commercial engine; as a result, the
US maker required a State Department licence before they could be exported.

Such absurd tales are part of a growing litany that is driving pressure in the
US for the first big overhaul of its military export controls since the height
of the cold war.

In a report to be released today, the Centre for Strategic and International
Studies (CSIS), an influential Washington think-tank headed by former deputy
defence secretary, John Hamre, concludes that the current US export control
system "expends enormous resources on trivial and unimportant security risks"
and in the process has driven a wedge between the US and it European allies.

A similar study chaired by several influential lawmakers including House
Republican policy committee chairman, Christopher Cox, said last week that US
export controls were increasingly at odds with rapid technological innovation
and the globalisation of the defence industrial base.

However, while pressure for change is growing - not the least from US defence
companies who fear losing business in Europe - the reform proposals are likely
to expose serious disagreements between the US and its allies over which weapons
should be controlled and to which countries.

The US military export control system, designed during the cold war, still
reflects a time when the US had a near monopoly over advanced weapons
technology, and US defence suppliers worked almost exclusively for the Pentagon.

Those realities allowed the US to craft a rigid system designed to keep any US
military goods out of the hands of potential adversaries. For instance, the US
prohibits the re-export of any military item that includes any US component
without the explicit approval by the State Department.

A second feature is the so-called "deemed export". Under US law, any access by a
foreign national or dual-citizen to classified weapons information is deemed to
be equivalent to an export to that country. Thus a European company that employs
nationals from France, Sweden and Germany would require multiple export licences
to work on classified US projects.

"This law was written 25 years ago when a British workforce was a British
workforce and French workforce was a French workforce. But that's not true any
more," says Joel Johnson of the US Aerospace Industries Association.

One result has been that export licences for sharing US technical defence data
have increased more than four-fold since 1995, even as the security threats to
the US have diminished.

These anachronisms in US law have produced growing tension between the US and
its European allies, and between defence companies on both sides of the water.

US export control curbs have also discouraged trans-atlantic mergers among
defence companies, and have made it more difficult to ensure that US and
European weapons systems will be compatible in wartime.

The emerging consensus in Washington is that the best way to fix these problems
is through closer co-operation with European defence partners.

The congressional study recommends a new regime in which the US and a handful of
key allies would harmonise their export control policies and identify common
security concerns in exchange for freer defence trade within the group.

That would allow US and European defence companies to integrate their operations
more closely, improving efficiencies and driving down government costs for new
weapons systems. However, the obstacles are enormous.

The UK, France, Germany, Sweden, Spain and Italy already allow such free sharing
of defence technology. But the agreement stipulates that the country of final
assembly can decide where the weapons are sold, and the component suppliers
cannot object.

Such a deal is unlikely with the US. It would pose no problem with buyers such
as Iran, Iraq, Libya and North Korea, where the US and Europe agree on denying
them weaponry. But there are serious disagreements with Europe over countries
such as India and China.

Already hardline US lawmakers are resisting any easing of US export controls.
Any proposal to liberalise defence trade with Europe is likely to be accompanied
by US demands that Europe tighten controls on China.

The CSIS report acknowledges that reforming US export controls is a daunting
task. But the alternative, it says, is growing isolation between the US and
European defence establishments, with high costs for both sides.

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                        Financial Times (London,England)

                              May 1, 2001 Tuesday
                                 USA Edition 1

US AND CANADA: Terrorists shift targets from Europe to US INTERNATIONAL ATTACKS
SHARP RISE IN ANTI-US INCIDENTS LAST YEAR WITH DEATHS ALMOST DOUBLED, SAYS
ANNUAL REPORT:

BYLINE: By CAROLA HOYOS

SECTION: US AND CANADA ; Pg. 5

LENGTH: 464 words

DATELINE: WASHINGTON


Terrorists are shifting their targets from western Europe to the US, the US
State Department said yesterday in its annual terrorism report.

Overall, international terrorist attacks increased 8 per cent from the previous
year to 423 in 2000. The number of anti-US attacks rose to 200 in 2000, compared
to 169 in 1999, while attacks in western Europe decreased to 30 from 85, largely
due to fewer incidents in Germany, Greece and Italy and no attacks in Turkey.

The US also suffered a sharp increase in casualties last year, with terrorist
attacks causing 405 deaths, nearly double the amount in 1999.

The most prominent attack against the US occurred last October when 19 people
were killed in an explosion aboard the USS Cole, which was docking in the Yemeni
port of Aden. Africa has also witnessed an increase in terrorist attacks in
2000, confirming a trend that began in 1995. Most of those attacks, however,
stemmed from internal civil unrest, the report said.

Regional centres of terrorism also continued to shift, the report noted: "In
2000, South Asia remained a focal point for terrorism directed against the US,
further confirming the trend of terrorism shifting from the Middle East to South
Asia."

In addition, it observed, state-sponsored terrorism has continued to decline - a
trend which Edmund Hull, acting co-ordinator for counterterrorism, attributed to
the international community's commitment to halting terrorism.

Still, the US was spared international terrorist attacks on its own soil last
year. Most attacks targeting the US came from two guerrilla groups in Colombia,
which bombed the multilateral oil pipeline in that country 152 times in 2000.

Still, the State Department's list of countries that allegedly sponsor terrorism
remained unchanged from the previous year. Iran, Iraq, Syria, Libya, Cuba, North
Korea and Sudan continue to be subject to US sanctions for their activities.
Iran remained the most active sponsor of terrorism, the department said.

Meanwhile, Washington continued discussions in 2000 aimed at removing North
Korea and Sudan from the group. While the trial of those Libyans accused of
bombing Pan Am flight 103 concluded in January 2001, Libya has yet to fulfil the
UN's requirements of responsibility, including paying compensation and
renouncing terrorism.

"The United States remains dedicated to maintaining pressure in the Libyan
government until it does so," the report states.

The US increased its pressure on Afghanistan's Taliban last year, sponsoring a
UN resolution that tightened sanctions on the movement. Nevertheless, it remains
a primary hub for terrorists, in particular Osama bin Laden, the Saudi-born
millionaire and head of al-Quaida, a network of Islamic extremists.
www.state.gov/www/global/ terrorism/index.html

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                        Financial Times (London,England)

                             April 30, 2001 Monday
                                  Surveys ENE1

SURVEY - ENERGY & UTILITY REVIEW: US edges closer to new energy policy: The
recent power crisis in California has raised American awareness of the situation
and the Bush administration seems to be more committed to the problem, writes
David Buchan

BYLINE: By DAVID BUCHAN

SECTION: SURVEY - ENERGY & UTILITY REVIEW ; Pg. 2

LENGTH: 1600 words


The US is striving towards some kind of energy policy. When it eventually gets
one, the impact on the rest of the world will be considerable.

The long-term health of the world's biggest economy, depends on resolution of
its domestic energy problems. It also has an impact on the market and climate
generally as the world's biggest importer of oil and emitter of greenhouse
gases.

The US is also home to the world's largest private energy sector, but also has a
government prone to use energy as a weapon of foreign policy. Through sanctions,
Washington has kept its own companies out of certain oil-producing countries and
tried to keep others out too.

The only absolutely clear thing about the Bush administration's national energy
policy is that it wants one. That itself is a change. Like governments in other
industrialised countries, Washington has steadily retreated from the energy
sector.

It has moved from tight administration (fixing natural gas prices, for example)
to loose regulation (shared, in electricity, with states and local governments).

The US has a Strategic Petroleum Reserve, created after the 1970s oil shocks,
and actually used it last year. In extremis, the US is also willing to go to war
for oil, as it showed in the Gulf conflict 10 years ago.

But the general sentiment was that the marketplace would provide a solution, and
that energy problems, like bad weather and economic cycles to which they are
related, could be relied on to fade away.

This complacency has been blown away by the California power crisis, last year's
run-up in world oil prices (partly due to US gasoline and heating oil shortages)
and the arrival in the White House of a president and vice-president with a
background in Texan oil.

The Texas-based oil and gas industry tends to see the crisis as primarily one of
supply. In the past 20 years, according to the American Petroleum Institute, US
oil output has fallen from 8.57m barrels a day to 5.84m b/d.

This is despite the fact that companies now drill deeper (to an average of 6,105
feet, compared to 4,512 feet in 1981), cheaper (average well cost of Dollars
769,000, compared with Dollars 855,000 in real terms in 1981) and better (a 80.3
per cent success ratio, compared with 69.6 per cent in 1981).

During the same period, imports, both crude and refined product, have risen from
6m b/d to just over 11m b/d.

Natural gas output has not fallen off to the same degree. But nor, in a sense,
can it. Environmental factors have driven up demand for gas faster than for oil.
Unlike oil, it cannot be imported by sea, except in the liquefied form that
still accounts for only 1 per cent of US gas consumption.

After the 1998-99 trough in activity, companies, spurred on by higher gas
prices, are now pressing every available rig into service for drilling in the US
and Canada. But they are having to run hard just to stay in place.

Mark Pappa, Houston-based chief executive of EOG, formerly Enron Oil and Gas and
now one of the most active drillers in North America, explains why. "We are now
getting gas out of the ground faster than we can find it, because technology in
accelerated extraction is advancing faster than in seismology," he says.

As a result, the rate at which production declines as a share of the base is
rising - from an average annual decline rate of 16 per cent in 1990 to 23 per
cent in 1999. "In the Gulf of Mexico, decline rates can go up to 40 per cent a
year," says Mr Pappa.

So the industry is eyeing federal land. The federal government owns one-third of
US land, but where, 20 years ago, 75 per cent of this was available for drilling
leases, now only 17 per cent is.

The industry hopes, with reason, that the Bush administration will reverse this
trend. However, this will not be easy.

The administration's plan to open up part of the Arctic National Wildlife Refuge
(ANWR) to drilling has stirred strong opposition. There are obstacles elsewhere,
too.

While the federal government owns and could, in theory, lease the entire outer
continental shelf for drilling, in practice California blocks exploitation of
the Pacific, while Florida, even under Governor Jeb Bush, the president's
brother, insists on keeping the drillers away from both its coasts.

Companies would also like to make fuller use of what leases they have, says John
Seitz, president of Anadarko. His company, currently North America's most active
driller on 21m acres, is doubling operations in the Rockies, but often has to
dismantle rigs temporarily during the wildlife breeding and tourist seasons.

If access to resources is a problem, so is the infrastructure to get it to
market.

A new report, produced jointly by the Baker Institute in Houston and the Council
on Foreign Relations in New York, points out how deregulation was initially
smoothed by "surplus capacities along the entire energy chain, accumulated in
the days of government-subsidised industry and falling demand".

The excess capacity existed in refineries, tankers, pipelines, rigs, and, of
course, in power generation. It allowed "expansion of energy use without
significantly affecting underlying costs," says the report.

The surplus capacity has largely vanished under the impact of deregulation, the
accompanying price volatility that has made new investment risky and quite
separate pressures from environmental regulation.

Take oil refineries. Twenty years ago, the US had 315 of them with a combined
capacity of 18.6m b/d and overall utilisation of 68.6 per cent. Last year, the
country had 155 refineries with a 16.5m

b/d capacity that was 92.6 per cent used.

It is the same story with the nuclear reactors that provide 20 per cent of US
electricity. Not a single new nuclear plant permit has been issued since 1979,
the year of the Three Mile Island accident.

But re-regulation is to blame for another handicap: the proliferation of
regional gasoline standards, complicating refining and logistic problems and
frequently causing local shortages and prices spikes.

A single standard was never going to suffice in so large a country with, for
instance, mile-high Denver requiring a less volatile fuel than low-lying
Houston.

But states and cities have increasingly used the 1990 Clean Air Act and the
replacement of lead in fuel to demand that the oil companies provide them with
differing cocktails of gasoline and diesel to suit their environmental needs.
The upshot is that the oil companies are now asked to provide more than 100
different fuels.

California, the north-east and the upper mid-west require gasoline reformulated
to be more oxygenated and less smelly; Atlanta demands a lower sulphur and less
evaporative fuel than the rest of Georgia; and garages in the two halves of the
city of St Louis (because they are in two different states) have to sell
different types of gasoline.

The standards are unenforceable in the sense that drivers cannot be confined to
a certain zone simply by virtue of what they carry in their tank. But this has
not lessened local authorities' enthusiasm for them.

In this area, as in that of electricity infrastructure, it is hard to see what
the Bush administration can do to prevent such balkanisation without riding
rough-shod over states' rights.

Equally difficult, but even more pressing is to forge a single electricity
transmission network to carry the huge amounts of power that are being traded
across the country by commodity energy brokers, such as Enron and Dynegy. The
federal authorities have slender means at their disposal.

While it has sole authority over the natural gas trade and network, the Federal
Energy Regulatory Commission (Ferc) has to share supervision of electricity
trade with states which themselves have sole power to rule on the siting of
power plants and lines.

Deregulation has made the latter task harder. In the days of local monopolies,
people knew that at least a power plant - however ugly - in their backyard would
be serving their needs. But in today's world of competitive long-distance power
trading, the plant could be lighting, cooling or heating the other end of the
country.

Nonetheless, Ferc realises it has to be more of a bully to preach the right
model for US power, even if that means treading on state sensibilities. "We were
overly deferential to California's rules and market design," says one Ferc
official.

US companies hope President Bush will give them a freer run at foreign as well
as domestic oil. The US has trade and investment bans on eight countries - of
which Iraq, Iran and Libya are Opec members, and a fourth, Sudan, a growing oil
producer. The upshot, according to Cambridge Energy Research Associates, may be
to reduce the production capacity of the three sanctioned Opec producers by
1.5-2m b/d.

That, in turn, makes the world market tighter than it would otherwise have been,
to the obvious detriment of such a big oil importer as the US.

US companies clearly fret more at the unilateral sanctions on Iran and Libya
than the multilateral United Nations embargo on Iraq, which also restricts their
competitors.

It may also be time for the US to recognise not only how outdated the notion of
energy independence at home is, but also the wisdom of cloaking its foreign
energy policy in a more multilateral guise.

The Baker Institute-Council on Foreign Relations report suggests ways this might
be done.

The US could take a less confrontational line towards Opec on prices, set Russia
an example by signing the European energy charter treaty that governs energy
trade and transit, and adopt a hemispheric approach to energy relations with
Canada and Mexico.

LOAD-DATE: April 30, 2001

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                             1141 of 2746 DOCUMENTS


                        Financial Times (London,England)

                             April 27, 2001 Friday
                                London Edition 1

THE AMERICAS: Bush seeks more presidential control over sanctions

BYLINE: By EDWARD ALDEN

SECTION: THE AMERICAS ; Pg. 14

LENGTH: 304 words

DATELINE: WASHINGTON


Those issues will lead the agenda in an internal review of sanctions policy
announced by Colin Powell, secretary of state. The review, to be launched
shortly, has been delayed because the Bush team is still trying to fill many of
the key administration posts.

Mr Powell has already initiated a review of US sanctions on Iraq, arguing that
the decade-long United Nations-led embargo has failed to weaken the regime of
Saddam Hussein.

The administration must also decide whether to support renewal of the Iran-Libya
Sanctions Act (ILSA), which allows for US sanctions against foreign companies
doing business in those two countries. The law, which has angered many European
countries, expires in August and US oil companies are pressing for the lifting
of sanctions.

But the official said the administration wants broader reform of sanctions
policy, not simply specific decisions on particular sanctions regimes.

The administration will consider supporting legislation introduced previously by
Senator Richard Lugar, which would sharply curb the use of unilateral sanctions.
While that proposal has drawn strong support from US business and farmers that
are harmed by economic sanctions, many Republicans favour their more robust use.

Presidential discretion would be a key theme of the review. Previous
administrations have also urged expanded presidential flexibility, but Congress
has resisted such demands. However, the official said congressional opinion had
shifted since 1998, when the Clinton administration was forced by law to impose
sanctions on India and Pakistan following their nuclear bomb tests. He said
while subsequent sanctions legislation has included greater presidential
flexibility, "it would be useful and appropriate to establish this more firmly
as a principle." For regional reports, www.ft.com/usa

LOAD-DATE: April 26, 2001

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                             1142 of 2746 DOCUMENTS


                        Financial Times (London,England)

                             April 27, 2001 Friday
                                London Edition 1

COMMENT & ANALYSIS: A vacancy at a very British institution: Whoever succeeds
Sir Christopher Bland as BBC chairman will occupy a job unlike any in the
commercial world, wr:

BYLINE: By MICHAEL SKAPINKER

SECTION: COMMENT & ANALYSIS ; Pg. 25

LENGTH: 1023 words


There is no executive position in the world quite like the chairmanship of the
British Broadcasting Corporation.

There are company heads with enormous reach and power, and there are many who
earn far more than the Pounds 82,000 (Dollars 118,080) paid to Sir Christopher
Bland last year. But there are no company articles of association that start
with the words: "Elizabeth the Second by the Grace of God of the United Kingdom
of Great Britain and Northern Ireland and of Our other Realms and Territories
Queen, Head of the Commonwealth, Defender of the Faith: to all to whom these
presents shall come, greeting!"

So begins the Royal Charter of the BBC, under which it operates, and it gives a
hint of the dilemmas that will confront whoever is selected to replace Sir
Christopher, who announced yesterday that he is becoming chairman of British
Telecommunications, and will leave the BBC when a successor is appointed.

The BBC is a national broadcaster. While great institutions such as British
Airways and British Rail have been sold or broken up, the BBC still belongs to
the nation, which funds it through a tax on the ownership of television sets.

For generations of Britons, the BBC represented everything that was best about
their country: fair, objective and authoritative. For millions outside the UK,
it still does. It is not only Britain's most highly regarded institution - it is
also the most respected name in international broadcasting. In many countries,
the BBC World Service remains an indispensable voice of truth, to be relied on
during times of political upheaval.

At home, however, the BBC has been under attack for years, from sections of the
press and from politicians, over the objectivity of its coverage, as during the
Falklands war and the US bombing of Libya, and over what some see as its fading
commitment to factual and serious programmes.

More recently, private sector broadcasters have accused the BBC of using public
money to compete unfairly against them. They have objected to the BBC setting up
a 24-hour news channel, and other digital channels. For the new chairman, these
pressures will become more acute as new channels and forms of communication
develop.

He or she will also have to be politically acceptable. The tradition at the BBC
is that the chairman and vice-chairman are from different political parties. Sir
Christopher is seen as a Conservative. His deputy, Gavyn Davies, is close to
Labour.

Mr Davies, who was appointed to the BBC post at the end of last year, is a
front-runner to become chairman. The government could then appoint a Tory as
vice-chairman. But broadcasting experts believe that could create trouble,
because Greg Dyke, the BBC's director-general, is also a government favourite
and had made donations to Labour. Having two strong Labour figures at the helm
would provoke strong protests from the opposition.

Ian Hargreaves, professor of journalism at Cardiff University and a former head
of BBC news and current affairs, says the government had probably hoped it would
not have to make a decision so soon. "Gavyn Davies was definitely put in there
with a view to becoming chairman after Bland. But the surprise departure of
Bland creates some difficulty. The Tories could feel very severely and justly
aggrieved if Davies becomes chairman," he says.

Two other names being mentioned as candidates for chairman - Gerry Robinson,
head of the Arts Council and former chairman of Granada, and Lord Stevenson,
chairman of Pearson, which owns the FT - would not solve the problem, as both
are associated with Labour.

Past BBC chairmen have proved willing to stand up to the governments that
appointed them. Marmaduke Hussey, Sir Christopher's predecessor, was appointed
chairman by the Thatcher government with an instruction, according to Norman
Tebbit, a leading Conservative minister, to "sort the place out".

Lord Hussey did appoint John Birt, who effected radical change as
director-general, but he also protested furiously when police raided the BBC in
Glasgow in 1997 and seized material related to a programme about a government
spy satellite.

Nevertheless, it is the appearance of political bias that will exercise the
Conservatives and its allies in the press if the new leadership of the BBC is
seen as too strongly aligned with the government.

Whoever takes the chairman's job will inherit a corporate structure unlike any
in the commercial world. The task of ensuring the BBC remains true to its remit,
and of appointing and dismissing the director-general, lies with the governors,
including the chairman and vice-chairman. Their powers are similar to those of a
board of directors. But they are appointed by the government to represent
various interests, so that there are governors to watch out for England,
Scotland, Wales, Northern Ireland and ethnic minorities.

The result is that few are known to a wider public. It is unlikely many people
in the UK could name even one BBC governor, let alone all 12. They have little
impact on those working at the BBC. "In my 15 years there, I only ever met one
governor, and that was for 10 minutes, in 1983, in the company of 20 other
people," says a former BBC executive. "They are more like school governors."

There is another BBC oddity: not only are the governors responsible for
appointing the director-general and setting strategy. They are also responsible
for regulating the BBC, deciding what broadcasting and media areas it can enter.

The government plans partly to exempt the BBC from control by Ofcom, its
proposed communications watchdog, although commercial broadcasters will be
subject to its supervision. A House of Commons select committee this year
described this as "absurd".

Some of the pressures the BBC faced during the Thatcher years have disappeared.
Labour ministers, unlike their Tory predecessors, are not hostile to the very
idea of a state-owned broadcaster.

But the anomaly of an organisation using public funds to compete in a market
where viewers can increasingly choose what they want will not disappear. The
post of BBC chairman might be hugely prestigious, but it is no sinecure.

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                        Financial Times (London,England)

                            April 21, 2001 Saturday
                                London Edition 1

FRONT PAGE - WEEKEND FT: A desert odyssey Ever since his father had taken him on
a visit to Libya, Justin Marozzi dreamed of returning one day to cross the
Sahara by camel. Then the chance came

BYLINE: By JUSTIN MAROZZI

SECTION: FRONT PAGE - WEEKEND FT ; Pg. 1

LENGTH: 1830 words





I stood on the crest of the dune, a giant curve of caramel blancmange rising
smoothly from the plain, and stared into the dry desert wind. To the south, as
far as the eye could see, was the vast, burning wilderness of the Awbari Sand
Sea. Its outermost fringes were lined with outcrops of rock looming out of the
sand.

Farther in, the rocks petered out until all that was left were the massed ranks
of dunes, a rolling infinity of soft burnished slopes and shapes hurrying into
the sun-dazzled horizon. To the north, several hundred feet below the summit on
which I stood, my travelling companion Ned and our Touareg guide Abdal Wahab
walked alongside our caravan of five camels.

From this height they were tiny figures, framed beneath a neat sandstone ridge
that ran for miles like a smudged crayon dashed across the sky. Idri, the next
oasis where we would feed and water the camels and stock up on provisions, was
150 miles away. Kufra, the far-flung oasis that was our final goal, was too
distant even to start thinking about. It lay more than 1,000 miles to the
south-east.

Ever since my father introduced me to Tripoli in my early 20s, I had longed to
return to Libya. Then, I had picked up and raced through the account of the
ill-fated British North African expedition of 1818-20 led by Joseph Ritchie and
dreamed of returning one day to cross the Sahara by camel, retracing the old
slave routes that ran through it. Now, six years later, I was here.

We had been travelling for a week from Ghadames, the ancient oasis town that had
once been one of the principal centres of the Saharan slave trade. The past
seven days had been an uncomfortable shock to the system. Long, hot days walking
alongside the camels, desperate to ride but too proud to suggest so to the
tireless Abdal Wahab, a middle-aged, mild-mannered man who seemed perfectly
content to remain on foot. Exhausted after these hungry hours trudging 20-25
miles across monotonous, flint-strewn plains, we flopped to the ground when our
guide deemed it time to halt in the evening.

There was never a moment for idle rest. On striking camp, we had to attend
immediately to the camels, hobbling them with ropes around the ankles to prevent
them from wandering too far, while allowing them to graze on patches of scrub.
Only after they had been brought back to camp in pitch darkness and had had an
extra hobble tied around one of their knees to stop them escaping - a
time-consuming process - could we turn to our own frugal dinner of tuna fish
pasta (which, over the course of the next two months, we would come to know and
hate), eaten shivering around a meagre camp fire.

Nights were freezing. By the time we woke in the half-light of dawn to the soft
cadences of Abdal Wahab saying his prayers, one of the most evocative aspects of
Islam and among the memorable moments of the expedition, our sleeping bags were
covered with frost.

Such hardships the desert presented were as nothing to the thrill of being in
such a remote and primevally beautiful landscape, unlike anything else we had
ever seen. Whether it was the empty, rocky plains, the grey-splashed, larva
fields, or the stubborn, endless sand seas, the loneliness of the Sahara was
compelling. Life in the desert with our own caravan of five handsome camels
trudging wearily beneath wide African skies had its own intoxicating rhythm.

The desert casts a powerful spell on all those who enter it. It always has.
"Your lungs are lightened, your sight brightens, your memory recovers its tone,
and your spirits become exuberant," wrote the Victorian explorer and orientalist
Sir Richard Burton of life in the desert.

"Your fancy and imagination are powerfully aroused, and the wildness and
sublimity of the scenes around you stir up all the energies of your soul whether
for exertion, danger or strife all feel their hearts dilate, and their pulses
beat strong, as they look down from their dromedaries upon the glorious Desert.
Where do we hear of a traveller being disappointed by it?"

Sir Richard's expedition resulted in his excruciating death from bilious fever
in the central oasis of Murzuk in what is today Libya. Though our journey led to
no fatalities, our caravan had its own adventures. In Murzuk we watched,
horrified, as Gobber, one of the largest camels, fell into a narrow trench and
lay upside down, tread-milling the air frantically as the mud walls collapsed on
top of him.

Salek, the Touareg guide who had succeeded Abdal Wahab in Idri, warned us the
camel had only moments to live. Only with the help of a dozen Nigerians, and
after huge difficulty securing a rope beneath him, did we finally manage to
bring Gobber to his feet, bloodied but defiant.

In the tiny oasis of Tmissah, east of Murzuk, we were joined unexpectedly by a
mongrel bitch. In time we christened her Tuna, after the breakfasts she devoured
from our left-over pasta. Trotting along next to us in the shade cast by the
camels, she travelled 400 miles across some of the bleakest, most inhospitable
and waterless terrain in the desert. In Tizirbu, she left us as abruptly as she
had joined our caravan.

In the latter stages of our journey we reached Buzeima, one of the most isolated
oases in the Libyan Sahara. It was a wild place with a shining lake of brackish
water guarded by mountains that rose out of the desert plain like shattered
cathedrals of rich purple rock, streaked black with iron and manganese. In 1921,
it had mesmerised the fearless English traveller Rosita Forbes. "Buzeima is the
loveliest oasis I have ever seen, with its strange ruddy hills - jewels purple
and crimson reflected in the silver salt mirage which girdles the bluest lake in
the world," she wrote.

By this point in our journey, after more than two months and 1,000 miles
travelling from Ghadames, the camels were at their lowest ebb. Asfar, my
favourite mount, an effeminate, honey-coloured animal with long eyelashes and
tufty ears, looked as though the fight was going out of him. He moved
unsteadily, his hooves bashing into his forelegs and drawing blood. Then he
began falling down repeatedly.

Mohammed Othman, our Tubbu guide for the last and most demanding stretch of the
expedition, thought he might not survive until Kufra. In the end, he and his
four colleagues limped into the town, far thinner versions of the camels we had
bought in Ghadames, and we had completed the 1,500-mile journey without loss of
life.

Like so many other places we had passed through - from the magnificent Roman
cities of Leptis Magna and Sabratha on the Mediterranean coast, to Tripoli and
the inland oases of Ghadames, Idri, Genna, Murzuk, Zuweila, Wau an Namus,
Tizirbu and Buzeima, Kufra was resonant with history.

"For a desert enthusiast like myself the first sight of Kufra was a
never-to-be-forgotten event," remembered William Kennedy Shaw in his history of
the Long Range Desert Group and its daring exploits in Italian-held Libya during
the second world war. "For Kufra, till the Italians took it, was a story-book
oasis, unattainable, remote, mysterious, the last goal of all African
explorers."

We had no chance to explore this forgotten outpost, which had once been home to
the ascetic Sanusi confraternity and, for long, a leading centre of the desert
slave trade. No sooner had we arrived than we were rounded up and interrogated
by a curt police officer beneath a portrait of a smiling Gaddafi.

Unimpressed by our lack of documentation and that of our newly employed Sudanese
guide, the senior officer arrested him and put us under hotel arrest. We were
under investigation on suspicion of spying, he told us, adding that Libya was no
longer scared of Britain, whose days of imperial glory were long gone. It was a
tense time enlivened by the occasional James Bond film, shisha pipe and sweet
tea in a local cafe, and the periodic arrival of a Libyan army officer trying to
sell us hashish.

After a week of farcical surveillance we were allowed to leave. Our journey had
ended.

Sir Wilfred Thesiger, the last great explorer of the 20th century, always
insisted it was the people, rather than the places, that stimulated his desire
to travel. We had been immensely fortunate with the Libyans we had met and
travelled with.

In Ghadames, the selfless Mohammed Ali had been of huge assistance while we were
preparing for our departure, not least in helping us find five camels suitable
for a long Saharan trek. Abdal Wahab, who possessed the silent gravitas of the
desert Touareg, was a generous and courteous teacher.

Perhaps the most remarkable figure of our travels was Mohammed Othman, who
accompanied us for more than 500 miles from Tmissah to Kufra. At 76, he was our
oldest and most inspirational guide. Far outstripping the distances we covered
with his predecessors, we walked and rode up to 35 miles a day with him. He
walked with a marvellous, swinging ease and never broke into a sweat.

Brought up on camels' milk and dates, with the occasional meal of venison if he
or his father had been successful hunting, he attributed his robust health to
his simple diet. His ancestors were the "troglodyte Ethiopians" referred to by
Herodotus (who visited Libya in about 450BC), "who of all the nations whereof
any account has reached our ears are by far the swiftest of foot".

Sitting in the lobby of the Hotel Sudan in Kufra, reflecting on the journey we
had completed, I felt flatness rather than elation. After the all-pervasive
stillness and solitude of the desert, the return to civilisation was a wrenching
affair. Already I missed the nights beneath the chilly constellations, the wind
fizzing across the dunes, the soft pad-padding of the camels and the
companionship of man and beast.

The Egyptian explorer and diplomat Ahmed Hassanein Bey, who in 1923 travelled
2,200 miles by camel and discovered the "lost" oases of Jebel Arkenu arid Jebel
Ouenat, south-east of Kufra, experienced similar misgivings on completing his
expedition.

"I realised with a stab of regret that this was my last day in the real desert,"
he wrote. "I thought how I should miss my men and my camels, the desolateness
and the beauty, the solitude and the companionship - in two words, the desert
and its life. I thanked God for his guidance across this vast expanse of
pathless sand, and found myself adding a prayer, half wistfully, that I might
come back to it again."

Thesiger, who was never known for his sentimentalism, felt an emptiness on
departing from Arabia for the last time. "I knew that I had made my last journey
in the Empty Quarter and that a phase in my life was ended," he wrote in Arabian
Sands. "Here in the desert I had found all that I asked; I knew that I should
never find it again." Our journey had been modest by comparison. It had been
neither as dramatic nor as long as his own pioneering travels. But I knew
exactly what he meant.


South from Barbary by Justin Marozzi is published by HarperCollins on May 8 at
Pounds 17.99.

More at http://timeoff.ft.com/weekend

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                        Financial Times (London,England)

                              April 9, 2001 Monday
                                  Surveys MEB1

SURVEY - MIDDLE EASTERN BANKING: Cards begin to win appeal: RETAIL BANKING by
James Drummond in Cairo: Progress so far is largely confined to the more
prosperous countries of the region and is well below that in th

BYLINE: By JAMES DRUMMOND

SECTION: SURVEY - MIDDLE EASTERN BANKING ; Pg. 2

LENGTH: 886 words

DATELINE: CAIRO:


In a region where it is still common to carry huge wads of notes to pay for big
purchases such as cars, cheques are widely viewed as worthless. But there is
hope. Credit cards, if not yet direct debit and standing orders, are catching on
in the Arab world. And so are the opportunities they give local banks to
diversify their sources of earnings.

Retail banking in the Middle East is in many ways quite sophisticated and agile
compared with other sectors of the economy. In a region where government is
still the main employer, most Arab states have left their banking systems alone.

Only in Syria, Egypt, Libya and Algeria, and to a much lesser extent Qatar and
the UAE, are banking systems still dominated by the state.

The result is that institutions in Jordan, Morocco, Lebanon and the Gulf, all of
which have largely privatised banking systems, have proved resilient in volatile
political environments and surprisingly innovative when it comes to new
technology.

Levels of credit and debit card usage and installation of associated
technologies reflect that willingness to innovate.

Visa, the association that manages the largest payments system in the Middle
East, had issued 5.44m credit and debit cards in the Arab world at the end of
December 2000, 4m of them in the Gulf. Total expenditure through the cards was
Dollars 26.0bn, an annual growth of 58 per cent.

Last year, Oman had the highest growth in card expenditure worldwide at 132 per
cent, Visa says. Qatar grew 52 per cent, while Saudi Arabia, a more mature
market, saw card expenditure increase by 35 per cent. Cards are increasingly
accepted not just by hotels and airlines but in shops, analysts say.

"Merchants are increasingly willing to take machines and to pay (commission) of
around 2 per cent. They realise there is a cost saving in that they don't have
to go to the bank at the end of every day," says Mark Johnson at Evresis, a
Cyprus-based consultancy.

While growth is high, there is still some way to go before card usage hits the
levels seen in the developed world. Cards account for 28 per cent of all
expenditure in Europe but only 3 per cent in the Gulf. Moreover, 75 per cent of
all card transactions in the Middle East are cash withdrawals from machines.

Visa is using debit card technology to promote the use of cards in the Middle
East. Michael Zoghby, Visa's vice-president for the Levant and West Africa,
argues that the installation of debit technology contributes to the development
of complete banking systems. He cites the example of Egypt, where there are only
9m bank accounts for a population of 66m.

"Not all the employed people (in Egypt) have a bank account. Until you expand
the banks' population you can't grow the banks - you can't grow the banks'
intermediation in the economy. You could say that . . . debit cards are
absolutely fundamental and much more profitable because credit cards can only be
given to a very small section of the population. If you get your debit cards
sorted then you can really start to grow the bank," Mr Zoghby says.

But Mr Johnson, of Evresis, says local banks are missing an opportunity to
develop their credit card business and enhance earnings. Favouring debit over
credit cards denies them the opportunity to earn interest on outstanding
balances. Rates of interest can go as high as 25 per cent on an annualised
basis.

"The problem is that banks do not wish to take the cards downmarket. They and
the regulatory authorities are very afraid of any bad debts. In Oman and Qatar,
for example, the central banks look with disfavour on any outstanding balances,"
says Mr Johnson.

The conservatism of the regulatory authorities and the institutions is not
helped by the fact that some of the largest credit card defaulters are members
of the royal families of the Arab world.

Elsewhere, in the poorer countries of the Arab world, the picture is mixed.
Libya and Sudan do not offer credit card facilities, and in Syria the
state-owned Commercial Bank of Syria has only recently announced that it is
looking to issue cards.

Mastercard, Visa's big competitor, has not yet targetted the Arab countries of
the Mediterranean rim, preferring to concentrate on the more prosperous Gulf.

The provision of ATMs mirrors the penetration of credit cards. The main appeal
of ATMs for bankers is that by allowing customers efficient access to their
accounts 24-hours a day they can attract deposits from customers disgruntled at
having to spend time in long queues at unautomated branches.

In the Gulf, the levels of installation are approaching those of Europe,
according to NCR, the ATM supplier which has about 75 per cent of the Middle
Eastern market.

Adonis Papaconstantinou, the head of NCR in the Middle East, says that while
profit growth through the 1980s and the early and mid-1990s was in the order of
20 to 30 per cent a year, growth slowed to below 20 per cent in 2000.

Unit growth has remained stable, but competitors in the form of Wincor Siemens
and Diebolb and improvements in technology have cut margins.

By virtue of its size, Egypt with a population of 66m is the market which offers
most in the way of potential, says Mr Papaconstantinou. Currently there are only
700 ATMs in Egypt while Turkey, a country with a similar, albeit wealthier,
population, has 8,000 installed.

LOAD-DATE: April 8, 2001

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                        Financial Times (London,England)

                              April 6, 2001 Friday
                                London Edition 2

COMPANIES & FINANCE UK: Going down the tubes proves good for Hunting: David
Buchan reports on how the putative mini-engineering conglomerate has succeeded
in changing its spots:

BYLINE: By DAVID BUCHAN

SECTION: COMPANIES & FINANCE UK ; Pg. 27

LENGTH: 718 words


Hunting has abandoned its pretensions to be a mini-engineering conglomerate and
become the world's leading supplier of tubes for the oil drilling industry.

Over the past 12 months the 127-year-old company - founded by a veterinary
surgeon in Durham - has changed into a largely North American business. About
two-thirds of its Pounds 1.2bn turnover is located there.

Hunting began life supplying equipment to the booming coal industry in northern
England, but quickly moved into the bulk shipping of crude oil by tanker. After
the war, it was one of the largest independent tanker owners in Britain, as well
as an aircraft manufacturer and airline operator.

The Hunting family still owns 30 per cent of the company, but the recent changes
have been led by an outsider.

Dennis Proctor, a Texas oilman, has been with Hunting Oil Services International
since 1993 and took over as chief executive in January.

Mr Proctor says Hunting will keep its headquarters and stock market listing in
London "for the moment", but its operations are effectively directed from
Houston where he is mostly based.

So far the switch from engineering has paid off, partly through luck. Mr Proctor
acknowledges the "fortuitous" way in which the oil price climbed for several
months after Hunting's decision last April to abandon its bias towards defence
in favour of oil services.

Pre-tax profits rose 11 per cent to Pounds 33.4m (Pounds 30.1m) as turnover
improved 16 per cent from Pounds 1.05bn in 1999 to Pounds 1.22bn last year,
driven by a 72 per cent increase in sales from oil services where operating
profits rose nearly fourfold to Pounds 35m.

This more than compensated for last year's cessation of Hunting's service
contract to the Aldermaston nuclear weapons laboratory. Hunting this month
concluded the sale of its defence services unit to Babcock International for
Pounds 61m, and is negotiating to sell its Irvin parachute-making business.

"Although the group had a good oil services business before," comments Peter
Hitchens of Williams de Broe, "it has been transformed by two acquisitions in
the past year." One is Vinson, a US tubular goods company acquired for Dollars
50m (Pounds 35m).

The other is Iberia Threading, a Louisiana company that uses the oil industry
technique of horizontal drilling to burrow under streets to install fibre optics
and other cables without tearing up roads.

Iberia, bought for Pounds 22.4m, contributed Pounds 6m to operating profits last
year.

It also has the advantage, Mr Proctor says, of being tied to the telecoms and
utility sectors rather than the oil sector on which the rest of the group is now
heavily dependent.

Two of Hunting's older businesses complete the group's oil orientation. It has a
64 per cent stake in Gibson Petroleum, a Calgary-based transporter of oil and
gas which, with 800 trucks and trailers, is the biggest distributor in western
Canada. The rest of Gibson is held by Texaco, which is set to be merged into
Chevron.

If Chevron does not want to keep its Gibson stake, Hunting appears ready to buy
it out. "Hunting has been involved in this kind of thing since the 19th century,
when it was hauling crude oil in steamships," says Mr Proctor.

The group also has Tenkay Resources, a small exploration and production company
that takes minority stakes in oil fields. It has done well in the past year by
participating in successful finds in the Gulf of Mexico.

But there is one downside to Hunting's new US orientation. The more American
Hunting becomes, the more it will come under US foreign policy sanctions, which
bear particularly heavily on the oil industry. All US oil and oil services
companies complain about the unilateral sanctions that forbid them to do
business in Iran and Libya where reserves are large and production costs are
low.

As an oilman who worked in Tehran for five years before the fall of the Shah, Mr
Proctor might seem ideally placed to use Hunting's UK status to take the company
into Iran. But "this would be very problematic", he says. US Treasury interprets
sanctions to "mean that no American executive can carry out business in Iran or
Libya".

But such obstacles do not bother Mr Proctor. As an oil man he has a naturally
optimistic streak. Why should he worry, "when there are so many other
opportunities elsewhere".

LOAD-DATE: April 5, 2001

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                        Financial Times (London,England)

                            March 21, 2001 Wednesday
                                London Edition 1

COMMENT & ANALYSIS: Keeping the lights on: As the California energy crisis
continues, the Republican administration is determined to find ways of
increasing the US's supply of oil and gas, write David Buchan and Nancy Dunne:

BYLINE: By DAVID BUCHAN and NANCY DUNNE

SECTION: COMMENT & ANALYSIS ; Pg. 22

LENGTH: 1351 words


The US faces a severe energy crisis, and the Bush administration intends that
the country should produce its way out of it. This was the message that Spencer
Abraham, the US energy secretary, delivered in a speech on Monday. It was
designed to pave the political ground for a new energy policy still under
preparation by a White House taskforce chaired by Dick Cheney, the
vice-president.

Yet the supply-side thrust of the policy, and the administration's sense of
urgency behind it, is already clear. President George W. Bush showed last week
that he would rather break a campaign pledge than preside over energy shortages.
He abandoned his promise to seek curbs on carbon dioxide, the main
planet-warming greenhouse gas, on the ground that such controls would make it
harder for the US to go on generating half its electricity from carbon-rich
coal.

The new policy's most eye-catching features will be an attempt to open more
Alaskan and federal land to drilling, to streamline environmental permits for
refineries and pipelines, and to review unilateral sanctions on US oil companies
operating abroad.

It will not save California from further power cuts this summer - nothing can;
that state's generating capacity is now 10-15 per cent short of its peak summer
demand. In fact, there could be other "Californias", Mr Abraham suggested this
week, saying the golden state's plight was neither isolated nor temporary. Over
the longer term, however, the administration's new approach could ease the
pressure that the US places on the world oil market. The US now imports around
11m barrels a day of crude and refined products - nearly a third more than
Saudia Arabia's entire output - out of the 19.5m barrels it consumes every day.
It will also tend to focus US foreign policy on energy partners in the western
hemisphere and Middle East.

The policy's supply-side bias is no surprise. Mr Bush, like his father, was
involved in Texas oil. Until last summer, Mr Cheney was chairman of Halliburton
, the world's largest oil services company. Mr Abraham is a former senator from
Michigan, home of the automobile.

But the issues they will have to wrestle with defy simplistic remedies. For a
start, they cut across party lines. Mr Bush will find some east coast
Republicans joining Democrats in the evenly divided Congress to oppose his plan
to open up a portion of Alaska's Arctic National Wildlife Refuge (ANWR) to
drilling. His brother, Jeb, the Republican governor of Florida, has come out
against the forthcoming federal lease of Block 181 in the eastern Gulf of Mexico
for offshore drilling.

Nor can the new Bush administration, much as it might like to, simply abdicate
the federal role in favour of the market. "The biggest thing the federal
government can do is get out of the way, so that it is not a barrier to
(environmental) permitting and so that the (energy) infrastructure can be
built," says J. Robinson West, chairman of Petroleum Finance Company in
Washington. "But it has also got to act to create some uniformity in a market
that has been badly Balkanised in terms of gasoline products and electricity
transmission."

Arguably, the US has not had a national energy policy since Jimmy Carter went on
national television in the late 1970s wearing a sweater to tell Americans to
economise. Energy policy lapsed under Ronald Reagan and George Bush senior,
amounting to a willingness to go to war to protect Middle East oil but neglect
at home. During Bill Clinton's eight years, environmental restrictions drove up
demand for clean-burning natural gas but hampered its supply.

The energy industry is delighted to have an administration that has adopted its
mantra about increasing supply, especially removing many of the restrictions on
the one-third of the US owned by the federal government. "We are the only
country that denies access to areas of known potential production," says Ken
Cohen, a vice-president of ExxonMobil.

The biggest controversy over such an area centres on the bid to open for
exploration up the coastal plain of Alaska's ANWR, which is strongly backed by
Frank Murkowski, the Alaskan senator who chairs the Senate energy committee. The
coastal plain could contain anywhere between 5bn and 16bn barrels of oil,
according to preliminary estimates by the US Geological Survey.

While Mr Abraham says the new energy policy goes far wider than opening ANWR -
on which the administration might be defeated - he claims that by disturbing as
few as 2,000 of ANWR's 19m acres the US could extract as much as 300 times the
oil that it has in its strategic petroleum reserve. But Dan Lashof of the
Natural Resources Defence Council believes that only 3.5bn barrels would be
recoverable from the ANWR, based on a Dollars 20 oil price.

By contrast, Mr Lashof and his organisation accept the idea of a new pipeline to
get Alaskan gas to the rest of the US. Everyone considers this gas, extracted
with Prudhoe Bay oil and then reinjected into the ground for storage, as a surer
bet. "We know it's there, we've already had it in our hands," says Skip Horvath,
president of the National Gas Suppliers Association.

The other source of supply that US oil companies are enviously eyeing is
foreign. US officials believe that President Vincente Fox of Mexico, who has
talked of more gas links with the US, might let US companies in on service
contracts, especially in power generation, but will continue to guard his oil
industry's sovereignty. Canada, for its part, is seen in Washington as doing all
it can, providing 15 per cent of all US gas.

The oil companies' bigger hopes lie further afield - in the Middle East, home to
half the world's reserves but partly placed off limits by sanctions. US
companies do not complain about multilateral United Nations sanctions on Iraq,
but about unilateral US bans keeping them out of Iran and Libya.

Conoco, for instance, had the frustration of seeing TotalFinaElf of France walk
off with its share of a1995 contract to develop Iran's Sirri field, and has
recently had to refuse Tehran's request for advice on development of the
Azadegan field. "We stood by as a country and as a company as the Japanese went
into Azadegan," says Michael Stinson, a vice-president of Conoco. So far Mr Bush
is playing for time, having last week renewed the bans on US companies operating
in Iran while he weighs the wider future of sanctions.

At home, the situation is reversed with the energy companies urging the federal
government to intervene in areas where the latter's power to do so is shaky. Mr
Abraham calls the country's energy infrastructure "woefully antiquated".
Individual states and cities have refused to let a single refinery be built in
the US in 25 years, and yet they now require the oil companies to supply several
dozen different types of gasoline and fuel to suit their climate and air. Small
wonder there are refining bottlenecks and gasoline shortages.

Electricity deregulation has also created new gaps in the power grid. The old
links in the system, sufficient for local monopoly utilities to swap power in
emergencies, cannot cope with what the new commodity energy brokers such as
Enron and Dynegy trade across the country. The volume of transactions involving
exchange of electricity from one region to another has grown 100 times in the
last five years.

Yet Washington, in the shape of the Federal Energy Regulatory Commission (Ferc),
has no prerogative to site power lines; that is for states. Ferc is trying to
cajole utilities into banding into Regional Transmission Organisations (RTOs).
But persuasion is proving slow. Too slow for Enron, which is taking a case to
the Supreme Court to try to get Ferc to use compulsion in creating RTOs. It
clearly hopes the Bush administration might also stiffen Ferc's spine.

It will be ironic if a conservative Republican administration ends up riding
roughshod over states' sensibilities in order to knit the nation's energy grid
together again. But it may be necessary. "Part of the genius of the US was to
have the largest single market," mourns Mr West of Petroleum Finance. "No
longer."

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                        Financial Times (London,England)

                             March 19, 2001 Monday
                                  Surveys AFR1

SURVEY - AFRICAN MINING: Africa's mining prospects

BYLINE: By GILLIAN O'CONNOR

SECTION: SURVEY - AFRICAN MINING ; Pg. 4

LENGTH: 1280 words




By Gillian O'Connor,

Mining Correspondent


Last year total exploration spending in Africa accounted for just Dollars 293m,
60 per cent less than in the boom year of 1997. This is mainly the result of
tighter budgets worldwide, but not entirely. Africa's share of the total cake
has also fallen, from around 16 per cent to around 13 per cent.

This is certainly not because Africa is mined out. Exploration experts agree
that the continent has "wonderful mineral credibility" (min-cred), even though
reserves in some of the traditional mining countries have been substantially
depleted.

But geological endowment is only one of the factors companies consider when
deciding whether to explore. Equally important is the profile of the country in
which they are considering exploring: the politics, mining code, laws, tax,
currency, investment rules. social and cultural traditions, mining experience,
environmental and health considerations, war risk and probable security of
employees.

And since most African countries count as relatively high risk to a banker, the
prospective returns need to be higher than they would be for a comparable
project in a low risk country such as Australia or Canada.

The latest analysis of exploration spending in 'Africa from Metals Economics
Group, the independent Canadian research group, shows how worries about a
country's profile often totally outweigh its mineral credibility. Countries such
as Angola and the DRC, for example, which probably score ten out of ten for
min-cred, but zero on their country profiles, attracted predictably little
exploration spending.

Equally, countries with good profiles and min-cred. but physical barriers to
exploration, such as Botswana and Namibia, were also among the also-rans. And
countries such as Kenya and Senegal with virtually no min-cred simply do not
feature.

We could not persuade anyone to provide an official ranking of the different
countries' attractions to explorers. So here are some of their off-the-cuff
comments.


South Africa: wonderful min-cred. There may be no new gold deposits left to
discover, but the Bushveldt is one of the three sites in the world (the others
are Sudbury in Canada and Norilsk in Russia) with top grade deposits of
platinum, nickel and chromite. It also has diamonds, iron ore and mineral sands.

The country profile may still worry some North Americans but is probably the
best in Africa. and the infrastructure is excellent. Political risk low. Biggest
worry is employee security, where SA gets only a "medium" rating along with
countries such as Zimbabwe.

Miners are sharply divided over the implications of the new mining law. Long
established companies with existing rights over large tracts of land see the
proposed "use it or lose it" legislation as a possible threat which they hope
will not be realised.

Potential new entrants welcome the proposal as likely to reinvigorate the
industry. The present system vests the mineral rights in the landowners, so
anyone trying to buy new rights has to negotiate farm by farm, which is
difficult and expensive. The proposed law, which would return unexploited
mineral rights to the state, should make negotiating new rights easier, and
prevent the established companies from simply sitting on some of the most
promising areas.


Botswana: mineral credibility high, particularly for diamonds, plus some copper
in east. But

Kalahari desert sand cover and salt layers make exploration difficult. Lack of
water and tricky logistics would hamper base metal developments. Country profile
good: government has positive attitude to mining. Insignificant security risk.


Namibia: mineral credibility high. Existing operations in coastal and marine
diamonds, uranium and lead/zinc. The newly-released Sperrgebiet - "forbidden
zone" - lands could have base metal potential in the south east. Elsewhere sand
makes exploration difficult. Country profile good. Political risk low.


Zimbabwe: mineral credibility quite good for gold, platinum and diamonds, though
deposits are small. Country profile has deteriorated recently. Medium security
risk.


Mozambique: mineral credibility poor, but no exploration for 20 to 30 years. so
residual prospectivity could surprise. May be some coal and beach sands. Country
profile improving.


Madagascar: mineral credibility medium to low. Possibly titanium, nickel
laterites, bauxite. Infrastructure worries. Environmental problems because of
unique fauna/flora.


Zambia: good mineral credibility though much has already been exploited (no
longer as good as neighbouring DRO). Still some good opportunities. Country
profile probably acceptable. Political risk low.


Angola and DRC (formerly Zaire): good min-cred for diamonds, cobalt. copper,
gold and nickel. DRC's resources better than Angola's but metal difficult to
extract. Very under-explored. Security risk high to very high in DRC; high in
Angola.


Gabon and Congo: modest min-cred but worth a look. Gabon has iron ore, Congo
diamonds and potash. Congo government is a cause of concern.


Cameroon and Nigeria: no min-cred, except possibly in the north of Nigeria,
because young sediments not old rocks. (Oil yes.) High security risk in southern
Nigeria, otherwise medium.


CAR, Chad and Sudan: some gold potential and lots of uranium in sandstone - but
outclassed by deposits in Canada and Northern Territory of Australia. Logistical
problems. Very high security risk in some areas. Political risk high in CAR.


Ethiopia and Somalia: some mineral possibilities (base plus possibly gold), but
politically fraught. Security risk mainly high, very high in parts of Somalia,
but medium in parts of Ethiopia. Political risk high in Somalia.


Kenya: poor min-cred except in extreme west near Uganda. Mineral sands. Medium
security risk.


Uganda, Rwanda, Burundi: some min-cred (particularly copper and gold, also
nickel and platinum in Rwanda and Burundi). Very difficult political situation,
though Uganda lower-risk. Very under-explored.


Tanzania: some modest gold and nickel deposits otherwise limited mincred.
Political risk low.


West Africa: Ghana has wonderful gold credibility and similar rock formations
continue into the Ivory Coast, Burkina Faso and Mali with some modest gold
deposits.

Infrastructure problems in Burkina Faso and Mali. Politics: low risk in Ghana
and Burkina Faso. Medium security risk in Ivory Coast; insignificant in Ghana
and Burkina Faso.


Liberia: high political and security risk. Has gold and diamond potential though
iron ore already mined out.


Sierra Leone: good min-cred: diamonds, gold and mineral sands, including best
rutile in the world. Politics very difficult. Very high security risk.


Guinea: wonderful bauxite. Good iron ore but transport problems, partly because
of politics. Reasonable diamond potential. One of the more stable governments in
West Africa. Medium security risk.


Senegal: min-cred low (beach sands and gold).


Mauritania: Some iron ore and diamonds, plus small base metal deposits. Long
distances; few people. Reasonable government. Low political risk.


Morocco: reasonable min-cred and sound government. Low political risk. Largest
phosphate producer in the world. Modest lead, zinc, gold.


Tunisia: modest min-cred.

Government fine: low political risk. Significant lead, zinc production.


Algeria: politics difficult, security risk high. Some min-cred with modest lead,
zinc, gold potential.


Libya: politics still too difficult. More potential for oil than hard minerals,
though some zinc potential.


Egypt: little potential, though some gold and base metal possibilities in Red
Sea hills. Low political risk.


CAR = Central African Republic

DRC Democratic Republic of Congo (formerly Zaire)

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                        Financial Times (London,England)

                             March 16, 2001 Friday
                                 USA Edition 1

COMMENT & ANALYSIS: Pariahs and their patrons: The US must use more than
commercial ties with China and Russia to stop their alliances with rogue states,
argues Thomas Henriksen

BYLINE: By THOMAS HENRIKSEN

SECTION: COMMENT & ANALYSIS ; Pg. 13

LENGTH: 823 words


The agreement this week between Russia and Iran to deepen military ties lifts
the curtain on a perplexing security challenge for the new Bush administration.
It is the intensifying but little-recognised co- operation between rogue states
and leading powers.

The agreement, which may involve the sale of millions of dollars' worth of arms
to Iran, is the latest example of an alarming trend. Last month's bombing by US
and UK forces of Iraq's souped-up radar and command centres close to Baghdad,
for example, was a response to another such agreement: among the main reasons
for the strike was a growing threat from Iraqi anti-aircraft systems that,
courtesy of Chinese advisers, was in the process of receiving a fibre-optic
upgrade.

This new dimension in containing Iraq heralds a different era in rogue state
behaviour. Rogue regimes spread violence and terrorism as well as manufacturing
biological, chemical and nuclear weapons and the missiles to deliver these
lethal payloads thousands of miles.

Throughout the immediate post-cold war, rogue states such as Iraq, North Korea
and Iran were viewed as isolated mavericks, loners that Washington could deal
with individually without the added worry of existing ties to big states. This
has changed.

Both Moscow and Beijing returned to the cold war practice of employing proxy
states to advance their agendas. But instead of pursuing an ideological goal of
spreading communism, they utilise rogues for strategic and even commercial
interests.

Russian companies, for example, export for cash arms to Iraq and nuclear
components to Iran, which threaten US interests and allies in the Middle East in
a way that the Kremlin finds expedient. This way Moscow evens the political
score for Nato's expansion eastward while demonstrating its need for due
consideration in the corridors of power.

Beijing facilitates North Korea's clandestine missile programme because this
puts the US on notice for its sales of advanced aircraft and ships to Taiwan. In
spite of declarations that it has no sway over its neighbour, China provides
material assistance, returns North Korean escapees to Pyongyang and offers
itself as a model for economic growth under a politically restrictive regime.

A year ago, Kim Jong-il, the reclusive North Korean leader, made an
unprecedented visit to the Chinese embassy in Pyongyang, indicating a
near-subordinate position toward China. Then he journeyed to Beijing. The
North's sudden agreement to a head-of-state summit in June with the South was
surely first blessed by Beijing.

It is not difficult to discern the strategic rationale behind such manoeuvring:
if tensions fall off on the Korean peninsula, there is little need of a strong
US presence in the South.

The North Korean supply of rocket engines to Iraq, Syria, Pakistan, Egypt and
Iran raises hard currency, the North's international profile, and the ante for
the US, which, since Bill Clinton's 1994 frame work agreement, has hoped to buy
off this rogue's potential threat. For promising to suspend its nuclear
programme, North Korea is to receive five billion-dollar nuclear reactors,
financed mainly by South Korea and Japan. In addition, it will receive 500,000
tonnes of US oil a year until these facilities come online.

Inter-rogue collaboration is another feature of the new security landscape.
States as diverse as Pakistan, Syria and Libya buy missile technology from
Pyongyang and work with North Korea to build delivery systems for deadly
warheads.

What options does this leave US policymakers? First and foremost, the US must
recalibrate its policies to take account of changing realities. Since impeding
the proliferation of weapons of mass destruction is the most pressing priority,
it strengthens the case for an American missile defence system as well as a
credible theatre missile defence - a regional equivalent of National Missile
Defence - for strategic allies abroad. Only when the US feels secure from rogue
missile firings or blackmail can it freely implement its foreign agenda and
genuinely protect its allies.

Second, the US must redouble its diplomatic exertions to halt Russian and
Chinese exports of missile and weapons-related technology to rogues. Commercial
engagement alone is not enough to nudge Moscow and Beijing towards free markets,
human rights and peaceful relations.

Finally, Washington must pursue forceful diplomacy that divides patrons from
rogue regimes and neutralises rogues. Since circumstances differ, the steps to
be taken against rogues can vary from muscular covert actions to topple a
dictator to forms of economic and diplomatic engagement.

But whatever the course of action, it must be sustained beyond the poll-driven
photo-opportunity approach so characteristic of the Clinton presidency.

The writer is senior fellow and associate director at the Hoover Institution
Philip Augar on the Myners Report into fund management: www.ft.com/personalview

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                        Financial Times (London,England)

                            February 26, 2001 Monday
                                London Edition 1

FT GUIDE TO THE WEEK: Annan meets Iraqis

BYLINE: By ROGER BEALE - COMPILER

SECTION: FT GUIDE TO THE WEEK ; Pg. 48

LENGTH: 1124 words


Kofi Annan, the United Nations secretary-general, will meet an Iraqi government
delegation in New York. Talks, planned to last two days, are expected to cover
trade sanctions and the deadlock over allowing arms inspectors back into Iraq.
The Baghdad delegation will be headed by Mohammed Saeed al-Sahaf, the foreign
minister.

Nice afternoon trip

The Middle East, the western Balkans and the "Everything but Arms" (EBA)
initiative to provide full duty-free access to European Union markets for the
poorest developing nations top the agenda of EU foreign ministers and trade
ministers in Brussels. The foreign ministers' discussions will end during the
afternoon to allow them to fly to Nice for the signing of the EU treaty
negotiated in December before they return to Brussels at about midnight for
further talks on Tuesday.

Farm problems

EU farm ministers meet in Brussels for two days of talks on mad cow disease and
Commission plans for supporting the EU beef and veal markets in the short and
long term.

Cocoa pact attempt

Cocoa producing and consuming countries meet in Geneva this week for a second
attempt at finalising a new international pact to help strengthen the world
cocoa market. Cocoa prices are currently soaring, in contrast with November when
the first set of talks took place. However, the draft accord, which will replace
the existing 1993 pact that expires next September, has no market-intervention
mechanisms, relying instead on dialogue between producers and consumers,
including the private sector.

Holidays

Greece, Cyprus, Bolivia, Brazil, Uruguay, Venezuela, Kuwait.

TUESDAY 27

Powell in Brussels

Colin Powell, the US secretary of state, joins other Nato foreign ministers in
Brussels for a meeting of the North Atlantic Council for the first time. While
he is in Brussels, Mr Powell will also meet Romano Prodi, the EU Commission
president, and Chris Patten, the external affairs commissioner.

Support for Colombia

Andres Pastrana, the Colombian president, will meet President George W. Bush in
Washington to discuss pursuing peace talks with Marxist guerrillas and continued
US support for his attempts to stamp out the illegal drugs trade.

Covering quake costs

The Indian government is expected to present a new budget to parliament. It is
likely to feature new taxes to cover the cost of the earthquake that struck the
north-western state of Gujarat on January 26.

Meeting the Mexicans

The EU and Mexico hold their first joint council under the economic partnership,
political co-ordination and co-operation agreement that came into force last
year. The EU's 15 foreign ministers and Commissioners Chris Patten and Pascal
Lamy will meet Jorge Castaneda and Luis Derbez, the Mexican foreign and economy
ministers, in Brussels.

Holidays

Portugal, Bolivia, Brazil, Panama, Uruguay, Venezuela.

WEDNESDAY 28

Gulf remembrance

Vigils will be held in remembrance of those who died in the Gulf War as the 10th
anniversary of the ceasefire agreement is marked. The US-based Gulf War Veterans
Community plans candlelight vigils in Washington as part of a series of events
that are also intended to draw attention to the plight of those who have
developed serious illnesses since their return.

Explosives report

A report by the independent commission investigating the firework factory
disaster in the eastern Dutch city of Enschede is expected to be published. The
explosion at the warehouse in May last year killed 19 people, injured almost
1,000 and destroyed 400 homes.

EU pay deal

Neil Kinnock, the vice-president responsible for European Commission reform,
unveils a new pay and pensions policy to reward merit among the 20,000 staff of
the EU executive.

FT Survey

Automotive Review.

Holidays

Brazil, Taiwan.

THURSDAY 1

Tokyo trade talks

About 600 people, including government officials from Asian countries, will
gather in Tokyo to attend an international symposium on the Asian economy and
the prospects for regional integration. The participants will mainly discuss the
formation of free trade agreements in the region.

Canada sanctions bid

The US and New Zealand will seek authorisation from the World Trade Organisation
to impose Dollars 35m each in annual trade sanctions against Canada for failing
to comply with an earlier WTO ruling against its system of dairy subsidies. The
WTO's dispute settlement body is expected to establish a panel to judge Canada's
compliance. If Canada is found to be in continuing breach of WTO rules, the same
panel will act as arbitrators to determine the amount of sanctions the US and
New Zealand can levy.

Holiday

South Korea.

FRIDAY 2

Japan's budget

Japan's lower house of parliament is likely to pass the national budget bill for
the next fiscal year, which starts in April. There is speculation that Yoshiro
Mori, the prime minister, will announce his intention to resign once the bill
passes the Diet. His support rating has continued to fall after a series of
scandals in his cabinet.

Sirte summit

Colonel Muammer Gadaffi, the Libyan leader, will convene a meeting of heads of
state of the Organisation for African Unity (OAU) in Sirte, Libya, as a
follow-up to the Lome summit in July last year. There, the Libyan delegation
proposed the formation of an African political and economic union and pushed for
the establishment of a pan-African parliament by the end of 2000.

Mexican minorities

Congreso Nacional Indigena, the Mexican organisation that represents the
country's 56 ethnic minorities and those of mixed race, meets in Nurio,
Michoacan. It will be joined by Zapatista supporters who are marching through 12
states to Mexico City for a rally on March 11. The Zapatistas are demanding that
the San Andres accords, which promise local autonomy and land for Indian groups,
should become law.

Holiday

Ethiopia.

SUNDAY 4

Swiss EU referendum

The Swiss government, which is in favour of joining the EU, is asking its
citizens to vote No in a referendum on a people's initiative to open
negotiations with Brussels straight away. The government, fearing a backlash
from Euro-sceptics, says conditions are not yet right. A second initiative calls
for cheaper medicine prices through use of generic drugs and parallel imports
and a third calls for a speed limit of 30km/h in built-up areas.

For open minds

The 10th annual International UFO Congress, Convention and Film is held in
Laughlin, Nevada. The congress aims "to struggle to change the minds and
perceptions of the general public (about UFOs) while providing valuable
information to those whose minds are already open and thirsting for knowledge"
(to March 10).

Start your engines

The Formula One season gets under way with the first grand prix in Melbourne,
Australia. Compiled by Roger Beale Fax 44 20 7873 3196

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                        Financial Times (London,England)

                            February 23, 2001 Friday
                                London Edition 1

THE ARTS: Making drama out of dramatic real lives RADIO:

BYLINE: By MARTIN HOYLE

SECTION: THE ARTS ; Pg. 18

LENGTH: 629 words


Front Row, Radio 4's arts slot, recently considered the parliamentary drama
sparked by Peter Mandelson's resignation as a piece of theatre - an imaginative
and valid idea. By the same token, a dramatisation of the trial of the Libyans
accused of planting the Lockerbie bomb should have made great drama. In the
event Tuesday's much-heralded afternoon play Lockerbie on Trial fell between
various stools.

Lasting all of 90 minutes, almost unheard of for drama now apart from Radio 3's
adaptations of stage plays, the work began with reminders of that pre-Christmas
flight in 1988, in painfully human detail. This Is Your Life, devoted to Harry
Corbett of Sooty fame, had just started when the town of Lockerbie was caught up
in nightmare. Residents remembered a sound "like an atomic bomb" and a terrible
screaming noise. One man recalled seeing the television news of Lockerbie in
flames. "I thought, poor people . . . It always happens to other people." The
flight's number, Pan Am 103, came up. "My wife said, that's Helga's flight."

The debris was spread over 810 square miles. The police amassed 4m pieces of
material, complicated by the 1m sewing-machine needles scattered from the cargo.
At the same time the CIA was collecting evidence. A tiny fragment of green
circuitry the size of a child's fingernail put them on a trail that led to
Washington, Togo and Libya. The suspects were indicted in 1991 but the best part
of a decade of pressure passed before the trial. The preamble provided the
greatest dramatic interest, for the judicial procedure itself, of necessity much
condensed, was fatally entrusted to all-too-recognisable thesp voices. The
conviction was shattered by stagey foreign accents, fruity Levantine villains
out of an Eric Ambler thriller, or grumpy Scots advocates. They showed up as
theatrical in the wrong sense compared with the voices of real people with which
the story was interspersed.

But then drama is hard to define. Much as I love John Betjeman's Summoned by
Bells, is it really the "great drama" promised by the announcer of Radio 4's
Classic Serial slot, even with what was ominously described as a "sympathetic
soundscape"? In fact the music of Jim Parker, an affectionate old hand at
accompanying Betjeman words, was aptly wistful, discreetly suggestive rather
than pedantically underlining, slightly intrusive in perkier moments. Betjeman's
own voice held the attention for an hour. The arbitrary ending with Betjeman's
young manhood marks the work's conclusion: I mention this for those new to the
work or foolish enough to think the Sunday Serial actually puts on serials, as
neither announcer nor Radio Times bothered with the information.

There was dramatic tension, and the far from cathartic arousal of anger and
concern, in a first-rate Analysis on London's property market, the crowding out
of the vital but lower-paid such as teachers and policemen, and the system that
enables councils to accept money from developers in lieu of statutory cheap
housing. Modish Islington that, as the admirably deadpan Fran Abram put it,
markets itself as an alternative West End, is starstruck by the prospect of a
theatrical development at the cost of affordable housing. Westminster is another
council allegedly pleased to accept money as a token for good deeds. Even Ken
Livingstone's temporary HQ is apparently earmarked for luxury flats when he
moves out. At least Westminster publishes its figures; seven others do not. This
is of course all above board - the money goes on council services - but
meanwhile the mirage of cheaper housing remains just that. If this had been on
television, Jeremy Paxman would have played the outraged inquisitor and Jeremy
Vine would have hectored and blustered. Keep at it, Radio 4.

Martin Hoyle

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                        Financial Times (London,England)

                           February 20, 2001 Tuesday
                                 USA Edition 2

MIDDLE EAST & AFRIA: Iran oil company talks to BP, Shell on joint ventures

BYLINE: By GUY DINMORE

SECTION: MIDDLE EAST & AFRIA ; Pg. 5

LENGTH: 448 words

DATELINE: TEHRAN


Iran's state-owned National Petrochemicals Company (NPC) says it is negotiating
with BP and Shell the construction of two big plants that could lead to the
biggest joint ventures formed with foreign companies since the 1979 Islamic
revolution.

Mohammad Peyvandi, NPC director of planning and development, said yesterday that
Shell was interested in investing in a plant in Bandar Imam and BP in Assaluyeh.
Both sites are designated as special economic zones on the Gulf, intended to
launch Iran as an important world power in petrochemicals.

"We will finance the projects ourselves or offer joint ventures, but normally
not majority ownership, preferably 50-50," Mr Peyvandi said. He put the value of
the ethylene and polyethylene plant being negotiated with BP at Dollars 1bn. The
plant has a projected annual capacity of 1m tonnes of ethylene.

"We have no problems with financing the schemes," he said. "We have always paid
our dues on time. Joint ventures take a lot of time to negotiate so in parallel
we are pursuing finance schemes."

Industry sources said Shell and BP were carrying out feasibility studies but
talks had not yet reached the stage of discussing joint ventures. They said some
Iranian officials had suggested that foreign companies could take a majority
stake.

Both companies are sensitive to US sanctions, notably the Iran-Libya Sanctions
Act passed by Congress that allows the US administration to impose penalties on
foreign companies investing in the Iranian energy sector. The act expires in
August, however, and is not expected to be renewed. It has so far never been
enforced.

John Browne, chief executive of BP, noting that BP has more than 40 per cent of
its assets in the US, said last week that although the British company had an
"absolute right" to do business in Iran, it would not do so without close
consultation with the US.

The big US oil companies are exerting pressure on the new administration under
George W. Bush to rescind separate executive orders, imposed by then president
Bill Clinton in 1995, that bar them from doing business with Iran.

The Assaluyeh project, with 12 phases of processing gas from the huge offshore
South Pars field, was described by one industry official as "massive".

The target date for several plants to come on stream, including the project
pursued by BP, is 2004. But the timing is already in doubt because of delays in
developing the gas field.

Mr Peyvandi said petrochemicals had overtaken carpets as Iran's second largest
export after crude oil. He predicted exports in the Iranian year to March 21
2001 would reach Dollars 800m, up from Dollars 580m last year. For regional
reports, www.ft.com/mideastafrica

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                        Financial Times (London,England)

                            February 16, 2001 Friday
                                London Edition 1

PEOPLE: Eizenstat joins US law firm PEOPLE

BYLINE: By LISA WOOD - EDITOR

SECTION: PEOPLE ; Pg. 14

LENGTH: 309 words


Stuart Eizenstat, until recently the Clinton administration's roving ambassador
on all matters concerning restitution for the Holocaust, is set to continue in
the world of resolving international disputes, this time with the prestigious
Washington law firm of Covington & Burling.

Eizenstat will head international business practice for the firm, of which Dean
Acheson was once a partner. He expects to devote his time to issues of trade,
sanctions and international problem-solving - rather like his past five years
mediating settlements over the Holocaust.

The firm's close political connections have continued and Charles Ruff, the
lawyer who defended President Clinton in his impeachment, was also a partner.

In recent years clients have gone to Covington & Burling for advice about
compliance with economic sanctions against Iran, Iraq, Libya, Sudan and Cuba. It
also took a case on a Japanese-American detention camp to the Supreme Court.

Eizenstat, who is taking time off to write up his experiences of the past few
years, intends to join the firm in the summer. He found the choice of firm
difficult but said he was looking forward to fresh international challenges.

He may also not be quite finished with his former job. He has helped to
negotiate agreements with Switzerland, Germany, Austria and France in the past
four years.

Austrian and French deals were signed in the last week of the Clinton
administration, as all sides hurried to reach a settlement while Eizenstat was
still in place. None of the four deals has been fully implemented and some face
potential legal hurdles, such as the new lawsuit against IBM.

The new administration has been asking for his advice and he may yet have to
spend a little more time on the mediation circuit as the deals are completed
before he throws himself back into private practice. John Authers

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                        Financial Times (London,England)

                           February 15, 2001 Thursday
                                 USA Edition 1

OBSERVER: New digs AVENUE OF THE AMERICAS

SECTION: OBSERVER ; Pg. 15

LENGTH: 314 words


New digs

Stuart Eizenstat, until recently the Clinton administration's roving ambassador
on all matters concerning restitution for the Holocaust, is set to continue in
the world of resolving trade disputes, this time with the prestigious Washington
law firm of Covington & Burling.

Eizenstat will head the international business practice for the firm, of which
Dean Acheson - an architect of the Marshall Plan and Bretton Woods - was once a
partner. He expects to devote his time to trade, sanctions and international
problem-solving, rather like his last five years mediating Holocaust
settlements.

The firm's close political connections have continued and the late Charles Ruff,
the wheelchair-bound lawyer who defended President Bill Clinton in his
impeachment, was also a partner.

In recent years, clients have gone to Covington & Burling for advice about
compliance with economic sanctions against Iran, Iraq, Libya, Sudan and Cuba. It
also took a case on a Japanese-American detention camp to the Supreme Court.
Eizenstat, who is currently taking time to write up his experiences of the last
few years, intends to join the firm in the summer. He found the choice of firm
difficult but said yesterday he was looking forward to fresh international
challenges.

He may also not be quite finished with his former job. Eizenstat helped to
negotiate agreements with Switzerland, Germany, Austria and France. The Austrian
and French deals were signed in the last week of the Clinton era, as all sides
hurried to reach a settlement while Eizenstat was still in place.

None of the four deals has yet been fully implemented and some of them face
potential legal hurdles, such as the new lawsuit against IBM. The new
administration has been asking for his advice and he may yet have to spend a
little more time on the mediation circuit before he throws himself back into
private practice.

LOAD-DATE: February 14, 2001

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                        Financial Times (London,England)

                           February 13, 2001 Tuesday
                                London Edition 1

INTERNATIONAL ECONOMY: Opec chief urges members to harmonise taxes on oil groups
COMPETITION FOR INVESTMENT STRATEGY MOOTED TO AVOID RIVALRY WITHIN CARTEL:

BYLINE: By DAVID BUCHAN

SECTION: INTERNATIONAL ECONOMY ; Pg. 12

LENGTH: 376 words


Opec members should set minimum taxes on international oil companies to avoid
competing against each other for foreign investment, according to the cartel's
secretary-general, Ali Rodriguez.

Mr Rodriguez's tax harmonisation idea was floated yesterday in a Reuters news
agency interview as most Opec countries are beginning to re-open their doors to
the western oil companies shut out in the 1970s.

The chief activity of the 40-year old cartel has been fixing prices and
production quotas. But Opec was also created to "avoid damaging competition
between member countries", Mr Rodriguez recalled.

"Competition can be for market share, or for investment to increase production,
by reducing (Opec) government take and creating inequality in the organisation,"
he said.

While some Opec members might regard tax harmonisation as an infringement of
their sovereignty, Mr Rodriguez clearly wanted to use the experience of his own
country, Venezuela, where until last month he was oil minister in the government
of President Hugo Chavez, to warn them of the risks of a free-for-all rush to
attract foreign investment. The Chavez government came to power in 1999 pledging
to reverse its predecessor's generous tax breaks and holidays for western oil
companies.

"If every producing country proceeded like Venezuela has (before the Chavez
government), we would destroy Opec," said Mr Rodriguez in the interview.

While Venezuela is in the process of raising royalty taxes, most of its Opec
partners in the Middle East are wooing western oil companies to return in
various ways. Iran has allowed foreign companies back in on a buyback or service
contract basis. Algeria is passing a new law giving foreign companies almost the
same rights as its national oil company. Western oil majors are tendering for
three big Saudi gas projects, are back in Libya and hope to return to Iraq if
and when international sanctions on it are lifted.

But Ibrahim Ismail, an oil adviser to the United Arab Emirates, told a Royal
Institute of International Affairs conference in London yesterday that Opec
countries would not give western companies more than joint ventures or service
contracts, and would need to retain their own national companies to operate Opec
production quotas.

LOAD-DATE: February 12, 2001

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PUBLICATION-TYPE: Newspaper


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                        Financial Times (London,England)

                            February 9, 2001 Friday
                                London Edition 1

COMMENT & ANALYSIS: Shadows over Nato's unity: The partners are not yet ready to
admit it but transatlantic disputes over defence and security reflect diverging
attitudes

BYLINE: By PHILIP STEPHENS

SECTION: COMMENT & ANALYSIS ; Pg. 19

LENGTH: 1114 words


Sometime during the next year or so we can expect a crisis in the Nato alliance.
The proximate cause will be Washington's plan for national missile defence
(NMD), Europe's efforts to develop an independent military capability or, most
likely, a mixture of both.

It's tempting to say the rupture will turn out to be an argument among friends,
a spat as fleeting as it now seems inevitable. After all, there have been rows
before in the alliance. During the 1970s, Europe scuppered the Pentagon's plans
to deploy neutron bombs against the Soviet threat. A decade later it recoiled in
horror at Ronald Reagan's Star Wars. The moments passed.

This time, though, it may be different. Europe's map has been redrawn and the US
has a new set of anxieties. It has been more than a decade since the fall of the
Berlin Wall. Nato cannot pretend indefinitely that nothing much has changed.
Another way of looking at the present tensions is to see them as the start of a
profound reconfiguration of the transatlantic security relationship.

On one level, it seems premature that there should be an argument now about
missile defence and European capabilities. Neither has a certain future.

The new administration in Washington is excited by a version of missile defence
that defies the constraints of existing technologies. President Bill Clinton's
administration experimented with a relatively modest system. But, in spite of
the Pentagon's efforts to pretend otherwise, it failed. The Republican vision of
"boost-phase" interception of incoming missiles from space- or sea-based
platforms leaps further by another two technological horizons.

It may never happen. Mr Reagan's dream of making nuclear weapons "impotent and
obsolete" was merely one of many failed attempts to build a shield over American
skies. The duck-and-cover days of the 1950s saw the Nike missile defence
programme. Lyndon Johnson funded Sentinel and Richard Nixon Safeguard. None of
these repaid the investment.

Europe's project for its own defence force looks equally fragile. Sure, European
governments are committed to a rapid reaction force. But they will assemble it
only by double-counting and double-badging existing forces and by scraping
around in dusty warehouses for suitable hardware.

Anyone who imagines this will be a serious fighting force is kidding themselves.
Europe is talking about carrying out modest peacekeeping tasks - and even then
it would still need US intelligence and communications. Quite recently, one of
the project's senior figures was asked whether, in 10 years or so, it might be
able to fight a high-intensity war. The answer was unequivocal: No.

All this gives cause for comfort to those who think a crisis can be avoided.
When Tony Blair arrives at Camp David to meet George W. Bush later this month he
will no doubt be well briefed on an earlier meeting there between a president
and prime minister. It was at Camp David in December 1984 that Margaret Thatcher
extracted from President Reagan the "four principles" that would subsequently
provide a Nato framework for Star Wars. The then Mrs Thatcher was later
denounced for her "treachery" by France but the deal averted a big split within
the alliance.

Mr Blair may well consider that those principles - affirming essentially that
the US remained committed to arms control agreements and that missile defence
would be a subject of negotiation with Moscow - are as relevant now as they were
then. What a fillip to the alliance it would be if George W. were persuaded to
deliver up a similar pledge.

In return, Mr Blair might offer Mr Bush an assurance that Britain will contain
France's ambitions for European defence. Paris wants an independent planning
capability for the new force. Washington sees that as a break with Nato. Mr
Blair thinks the Americans have a point.

There should be a deal there somewhere. The mood at the meeting this week
between Colin Powell, the US secretary of state, and Robin Cook, Britain's
foreign secretary, was said to be emollient. Mr Powell welcomed Mr Cook's
assurance that the European force would remain embedded in Nato. He offered in
return that the new administration would consult its allies on missile defence.

Less clear is whether Mr Powell speaks for the administration. The battle for Mr
Bush's ear is under way in earnest. And Donald Rumsfeld at the Pentagon is
altogether more impatient with European sensitivities.

Mr Rumsfeld, one of Washington's political bruisers, does not like the idea of
Moscow (or anyone else) having a say in the defence of the US homeland. Serving
in Gerald Ford's cabinet more than a quarter of a century ago, he opposed the
Strategic Arms Limitation Treaty. When European policymakers warn that NDM
threatens the 1972 Anti Ballistic Missile treaty, they get in return a sense
that Mr Rumsfeld sees that as a plus rather than a minus. But in a curious way
Mr Rumsfeld's may turn out to be the more honest analysis. NMD and Europe's
military aspirations will both have a limited impact in the short term but they
reflect the diverging preoccupations of the US and its allies. They speak to
different concepts of security 10, 15 or, more likely, 25 years hence.

In the good old days of the cold war, the Soviet menace was always more
important than any differences within the alliance. The US and Europe both
sheltered under the umbrella of Mutually Assured Destruction. But Moscow no
longer threatens a nuclear holocaust. Russia is powerful but poor. US hegemony
is assured.

So traditional deterrence has lost its appeal. US security concerns now focus on
the proliferation of weapons of mass destruction and the missile technology
needed to deliver them. The Central Intelligence Agency warns that the US is
more likely now than during the cold war to face a missile attack. The new
enemies are the rogue states: North Korea, Iran, Libya. The capacity to destroy
them is insufficient comfort. Washington must build impermeable defences.

Europe takes from this a rather different perspective. It sees a nation that has
become too rich and powerful to send its soldiers to war or to accept that it is
anything but invulnerable to outside threat. Europe's response must be to end
the chronic dependency on its US ally and to learn to cope with the small but
lethal wars on its own continent.

In this respect, NMD and European defence are significant as much for their
symbolism as for substance. They represent changing mindsets. Neither partner is
willing to admit this. If Nato has lost its guiding purpose, the US and Europe
have nothing yet to replace it. But they cannot much longer deny that the
parameters of the relationship have decisively shifted.

LOAD-DATE: February 8, 2001

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                        Financial Times (London,England)

                           February 8, 2001 Thursday
                                London Edition 1

MIDDLE EAST - THE ISRAELI ELECTION: Sharon's victory leaves Palestinians at a
difficult crossroads: His election may fuel the intifada but divert energies
from building civic institutions, writes Judy Dempsey:

BYLINE: By JUDY DEMPSEY

SECTION: MIDDLE EAST - THE ISRAELI ELECTION ; Pg. 14

LENGTH: 729 words


Ariel Sharon's election as Israel's new prime minister could prove a mixed
blessing for the Palestinians, providing them with a reason to step up the
intifada (uprising) but diverting their energies away from establishing good
governance in preparation for statehood.

Officials in Yassir Arafat's Palestinian Authority say they know Mr Sharon will
never go as far as Ehud Barak, former prime minister, in making concessions on
land and Jerusalem.

On the other hand, they believe the PA will regain international support because
of Mr Sharon's reputation for confrontation rather than compromise.

Such calculations, however, are of little solace to Palestinians in the West
Bank and Gaza Strip. With a speed that has shocked the most hardened critics of
the PA, Palestinian society has fragmented rapidly in recent weeks, almost to a
state of anarchy.

"The pace of fragmentation is so fast. All energy is now being directed
inwards," said Eyed As-Sarraj, director of the independent Gaza Community Mental
Health Programme. "The level of political and domestic violence has increased.
It is very frightening."

When the intifada against the Israeli occupation began last September, it
unleashed huge energies of solidarity and unity. Crime levels went down.
Self-help organisations sprang up. "There was a real feeling we could defeat the
Israelis," said a Fatah official from Mr Arafat's political movement.

But the Palestinians soon became sapped of energy and motivation. "The PA failed
to provide a sense of direction and a strategy," said Mr Sarraj. In addition,
explained Ghassan Khatib of the Jerusalem Media and Communication Centre, the
institutions of law and order soon broke down, with the PA failing to protect
them.

The heavy closures Israel imposed on the West Bank and Gaza, and between
Palestinian cities, towns and villages, meant people could not seek redress in
the courts, the police, or PA ministries. Local leaders replaced the legitimacy
of the central authority.

The vacuum left by these fragile civil institutions - rarely given independence
by Mr Arafat - was filled by anarchy. "Not only is the PA imploding; Palestine
is slipping into anarchy," says Khalil Shikaki, director of the Ramallah-based
Palestine Research Centre.

The anarchy has taken the form of gun battles, executions, assassinations,
disappearances and feudal fights. Earlier this week, the Preventive Security
forces and Hamas Islamic militants clashed for hours at the Jabalia refugee camp
in Gaza, leaving many wounded.

Last month, Hisham Makki, a director of Palestine Television, was gunned down in
Gaza by a shadowy group calling itself the Martyrs of Al-Aqsa, which accused him
of corruption. Ghazi Jabali, head of the civil police in Gaza and loathed by
many Palestinians, was detained for alleged corruption. There are unconfirmed
reports Mr Arafat has sent him to Libya.

Moh'd Abu Sharia, chairman of the General Personnel Council, the bloated
Palestinian civil service which provides thousands of jobs regardless of
qualifications, has also disappeared. Again, critics allege he was involved in
corruption.

"Much of the energy and frustration is being directed at people who are corrupt.
These are easy targets," says Mr Sarraj. "There is no rule of law. There is no
community leadership - no civil institutions to prevent this fragmentation."

Human rights activists say Palestinians are taking their anger out on the PA,
using the political vacuum to settle old scores. The economic hardship arising
from the closures has only added to the frustration on the ground, as
Palestinians accuse the PA of failing to channel funds from its private bank
accounts to help poor families, besides doing little to stamp out corruption and
crime.

A World Bank report published this week showed that poverty rates had increased
by 50 per cent since the beginning of the intifada, with an estimated one-third
of the population, or about 1m, living below the poverty level of Dollars 2.10 a
day.

The cruel paradox, say human rights activists, is that when Mr Sharon forms a
government, PA officials believe it will once again be easier to rally the
people to fight again.

"We are in a terrible trap," says Mr Sarraj. "It is very easy to direct our
energy against the common enemy. But it prevents us from looking in at
ourselves, from being pro-active instead of always reacting."

LOAD-DATE: February 7, 2001

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                        Financial Times (London,England)

                           February 7, 2001 Wednesday
                                London Edition 1

MIDDLE EAST & AFRICA: Libyans march in protest at Lockerbie verdict

BYLINE: By JAMES DRUMMOND

SECTION: MIDDLE EAST & AFRICA ; Pg. 12

LENGTH: 360 words

DATELINE: CAIRO


Thousands of Libyans marched in the streets of Tripoli yesterday for the second
time in four days, shouting anti-US slogans and protesting at the detention of
Abdel Basset al-Megrahi, the man found guilty of causing the Lockerbie
explosion.

Police were forced to fire tear gas and use batons to disperse the
demonstrators, some of whom gathered round the British embassy and tried to
break into the United Nations offices in the Libyan capital.

The protests came on the second day of a three-day national holiday called by
Muammer Gadaffi, the Libyan leader, to allow local people's committees to
protest at the detention of Mr Megrahi who was found guilty last week of causing
the explosion which killed 270 people in 1988. Libyans are angry that, while
they are being asked to pay compensation for the Lockerbie bombing, a raid on
Tripoli by the US air force in 1986 in which 37 died has not been taken into
account.

On Saturday an orchestrated demonstration of mainly young protesters also
gathered in Green Square in central Tripoli and around the UN offices. The
demonstration passed off peacefully although three men cut their throats with
razor blades apparently in protest at the verdict.

Col Gadaffi on Monday poured scorn on the judgment reached by the three Scottish
judges sitting at Camp Zeist in the Netherlands, although he did not produce any
fresh evidence on the case.

"I really don't know how the judges came to such a conclusion. I expected a
clear verdict. I didn't expect this fog," Mr Gadaffi told a press conference on
Monday.

He was particularly scornful that Mr Megrahi could be found guilty while his
alleged accomplice, Al-Amin Khalifa Fhima, was acquitted.

Mr Megrahi is likely to appeal against the verdict and his sentence of 20 years.

The Libyan leader chose instead to blame the US and in particular the Central
Intelligence Agency for the bombing.

"Ask the CIA. Perhaps they know something about it," he said, when asked who he
thought was responsible.

Britain re-established diplomatic relations with Tripoli in July 1999 after a
rupture of 15 years following a settlement over the 1984 killing of a
policewoman in London.

LOAD-DATE: February 6, 2001

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                        Financial Times (London,England)

                            February 2, 2001 Friday
                                London Edition 3

US & MIDDLE EAST: Gadaffi defends Lockerbie man

BYLINE: By JAMES DRUMMOND

SECTION: US & MIDDLE EAST ; Pg. 11

LENGTH: 323 words

DATELINE: TRIPOLI


An unrepentant Muammer Gadaffi, the Libyan leader, said yesterday he was in a
position to prove the innocence of Abdel Basset el-Megrahi, the Libyan found
guilty of the 1988 Lockerbie bombing.

Making his first public comments on Wednesday's verdict from the middle of a
media scrum at his Aziziya headquarters on the outskirts of Tripoli, the Libyan
capital, Colonel Gadaffi also insisted that it was Libya that deserved
compensation for the 1986 bombing by the US air force.

"Abdel Basset is innocent. The verdict of the court came as a result of pressure
from America," Mr Gaddafi told journalists. "I have new information which I will
make public on Monday."

Col Gadaffi appeared to reject the idea of Libyan compensation for the victims
of the 270 families who died in the Lockerbie bombing. But his commments came as
Libyan officials said Mr al-Megrahi would appeal against conviction and
indicated Libya would be ready to pay compensation if the court ruling were
upheld.

While rejecting any responsibility for any government role in the bombing, which
killed 270 people, Mohammed al-Zwai, Libya's ambassador to London, told the FT
that Libya would abide by United Nations resolutions "not because the state is
responsible for the act but because of our responsibility towards our citizens".

In his first comments since the verdict was delivered by a panel of Scottish
judges in Camp Zeist, in the Netherlands, Col Gaddafi chose a site inside his
sprawling base which was bombed by the US. The building has been left
unrepaired. "These are the victims. Look to the house. Who paid, who are the
victims?" he asked.

Asked about his next step, the Libyan leader said only: "We demand that
sanctions be lifted immediately."

Libya suffered seven years of UN sanctions, which were only suspended when the
two Libyans accused of the Lockerbie crime were handed over to the Scottish
authorities in April 1999. Push for full inquiry, Page 5

LOAD-DATE: February 1, 2001

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                        Financial Times (London,England)

                           February 1, 2001 Thursday
                                London Edition 1

LOCKERBIE VERDICT: Patriotic questions on the streets of Tripoli REACTION IN
LIBYA:

BYLINE: By DRUMMOND

SECTION: LOCKERBIE VERDICT ; Pg. 4

LENGTH: 397 words


On the streets of Tripoli yesterday afternoon, the reaction of most Libyans was
one of muted anger mixed with incredulity that one man, Abdel Basset Ali
Mohammed al-Megrahi, is facing a lifetime in prison while his alleged
accomplice, Lamen Khalifa Fhimah, was found not guilty.

A few young men in cars from the Jamahir, the people's committees, drove round
Green Square, which dominates central Tripoli, beeping horns and holding aloft
pictures of Muammer Gadaffi, the Libyan leader. It was difficult to tell whether
they were celebrating or protesting at the verdict handed down at Camp Zeist.

On nearby 1 September Street, Ali Abdullah, a cafe proprietor, echoed the
general mood. "How could the judges do that? Why the change? How could they
possibly find one man guilty and the other innocent?" he asked. "Of course we're
angry that one of our fellow countrymen is facing jail."

Mr Abdullah said he and his countrymen had followed the case closely on one of
20 satellite television channels now available in Libya.

However, he would not condemn the Scottish court at Camp Zeist as being subject
to political pressures. "The Scottish courts are well known but really I don't
know," he said. "Listen, we like sports here. We follow the football in Italy
and Spain. We're not political people here."

The official Libyan reaction was very low-key. The news of the verdict was
announced as the second item on the evening TV news, and claimed an
"unprecedented victory" for the Libyan masses in forcing the US and Britain to
hold the trial on neutral ground. The lead item concerned a speech by Col
Gadaffi to a conference in Sudan.

In his shop on Mohammed Maqref Street, Khalifa Ali al-Maghrani was worried by
the prospect of a renewed blockade on Libya.

Ten years of sanctions preventing air travel to and from Libya were lifted in
1999 when Mr al-Megrahi and Mr Fhimah were handed over to the Scottish court for
trial. Libyans say prices have dropped dramatically since the sanctions were
lifted and that European tourists are returning to boost the economy.

"We suffered for 10 years because of the blockade. That was down to Britain and
the US. It could happen again," Mr Maghrani said.

His son, he added, was a pilot with Libyan Arab Airlines who trained in London
and Scotland. "I remember the English when they were here during the war," he
said. "They were good people."

LOAD-DATE: January 31, 2001

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                        Financial Times (London,England)

                           February 1, 2001 Thursday
                                London Edition 1

LEADER: Lockerbie crime

SECTION: LEADER ; Pg. 20

LENGTH: 425 words


The families of victims of the Lockerbie atrocity may be disappointed about the
outcome of the trial of the two Libyan suspects, which ended yesterday after 84
days. The verdict leaves many questions unanswered. One Libyan intelligence
agent has been found guilty. The other defendant has been acquitted. And Colonel
Muammer Gadaffi, presumed to have ordered the crime, remains firmly in place.

This trial was never going to provide full satisfaction. But it does start to
fulfil the requirements for justice as laid out in the United Nations
resolutions on Libya. And despite its shortcomings, it marks an important step
in international efforts to combat terrorism.

The sanctions imposed on Libya in 1992 were specifically aimed at forcing it to
surrender the accused and renounce terrorism. They were suspended in 1999 when
Col Gadaffi finally agreed to the extradition. But even that might have been
impossible had the Libyan leader not received assurances that the trial would
not target his regime.

Imperfect as it may be, the UN process must continue. If the conviction of Abdel
Basset al-Megrahi is confirmed - there may well be an appeal - Col Gadaffi still
has to comply with the remaining UN demands.

The conditions include paying compensation to the families of the victims and
accepting responsibility for the crime. If his actions are satisfactory, the UN
security council should lift the sanctions permanently.

That also may be a good time for the US to reconsider its own unilateral
sanctions against Tripoli, in particular the controversial Iran/Libya Sanctions
Act, designed to prevent non-US companies from investing in the two countries.
ILSA has been ineffective. And as European companies rush to Libya, the rest of
the US sanctions do little more than keep American companies out of the
competition.

An end to sanctions, however, must not be seen as a sign of weakened
international resolve to keep Col Gadaffi in check. Sanctions on arms sales
should remain. So should efforts to ensure that Libya stays free of weapons of
mass destruction.

True, the maverick colonel now seems relatively harmless. Instead of meddling in
other countries' affairs by sponsoring rebel groups, he wants to raise Libya's
profile by promoting conflict resolution.

But his taste for mischief should not be underestimated, as evidenced by his
attempt last year to smuggle Scud missile parts through Britain. Such actions
must not be tolerated by western governments. They are a stark reminder that
Libya still has to be treated with suspicion.

LOAD-DATE: January 31, 2001

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                             1161 of 2746 DOCUMENTS


                        Financial Times (London,England)

                           February 1, 2001 Thursday
                                London Edition 2

LOCKERBIE VERDICT: Gadaffi treads a path to rehabilitation: Roula Khalaf
examines the implications of the trial's outcome for the Libyan leader. He may
reap rewards, not recriminations, if he wins a permanent end to sanctions

BYLINE: By ROULA KHALAF

SECTION: LOCKERBIE VERDICT ; Pg. 4

LENGTH: 700 words


The Lockerbie case turned out, after all, to be a typical Libyan affair, lacking
a sense of clarity and closure.

But although Colonel Muammer Gadaffi may loudly express his displeasure with the
guilty verdict delivered to one of the two Libyan defendants, he is, ironically,
likely to receive more reward than recrimination in the long term.

"Even a guilty verdict for the two accused would not have been so bad for him -
the international community has already accepted Gadaffi as saying 'I was once
involved in terrorism' and agreed to be forgiving," says one western diplomat.

Despite the demands of relatives of victims for an indictment of the Libyan
leader over the bombing of Pan Am flight 103 over Lockerbie in December 1988, it
has long been clear to Libya that sufficient evidence did not exist to take the
case further. Assurances are believed to have been given to the colonel that the
case concerned the two Libyans accused, and was not aimed at undermining his
regime.

Col Gadaffi's first move may well be an appeal coupled with diplomatic efforts
to contain the damage of the conviction. "The Libyans will appeal for sure, but
they'll also let diplomacy take its course; they want to contain the situation
and to appear cool," says Saad Djabbar, a North Africa expert.

Along with a possible appeal, which will take several months, Libya will begin
its push for a total lifting of United Nations sanctions - an issue that will
take months and possibly years.

In practice the sanctions are no longer in effect, having been suspended when
Libya surrendered the Lockerbie suspects for trial in 1999. Barring outrageous
behaviour by Tripoli, they will not be reimposed. But a permanent end to the
sanctions is a symbolic gesture that Col Gadaffi is determined to achieve.

A lifting of the embargo requires Libya to fulfil several remaining UN criteria.
With the US far less enthused than Europe over Libya's rehabilitation in the
international community and under pressure from the families of the Lockerbie
victims, it can be expected to show resistance to ending the sanctions.

Once the legal process is over, Libya is likely to agree to the UN-stipulated
demand for payment of compensation - as it has indeed already done in the case
of the 1989 bombing of a UTA flight over Niger. But there are other grey areas
in UN resolutions that could lead to different interpretations by members of the
UN Security Council, with the US taking the hardest line.

Differences could emerge over whether Libya can be deemed to have ceased all
involvement in terrorism. The UK and the rest of Europe, eager to expand ties
with the Libyan regime and accelerate business access to the Libyan market - in
particular the under-developed oil and gas industry - are satisfied with Libyan
assurances that the days of sponsorship of terrorism are over.

But the US says some inactive terrorist camps have yet to be dismantled. Equally
controversial could be the requirement that Libya disclose all it knows about
the Lockerbie crime and that it accept responsibility.

Even harder for Col Gadaffi will be to convince the US to lift its unilateral
sanctions against Libya. Before leaving office, former US President Bill Clinton
renewed the sanctions first imposed in 1986 for six months rather than the usual
period of one year. The Iran/Libya Sanctions Act, which penalises foreign
companies operating in Libya and Iran, comes up for renewal in September.

"Gadaffi wants better relations with the US but the verdict makes it more
difficult - the US will accept the verdict but it will look at other ways to get
at Libya," says George Joffe, a Middle East expert.

The US families of the victims and their strong support in Congress means that
the civil case they have filed will go through and probably lead to a massive
damages award, which might be paid by the US government and compensated for from
frozen Libyan assets.

There are expectations that the new Bush administration will not renew the
sanctions act, and that oil companies will press for an end to the other
sanctions against Libya. But as Mr Joffe says: "There is also no indication that
the administration will want to be mild with Gadaffi."

LOAD-DATE: January 31, 2001

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                        Financial Times (London,England)

                           February 1, 2001 Thursday
                                London Edition 2

LOCKERBIE : VERDICT: United approach ensures suspects face court DIPLOMACY:

BYLINE: By ROULA KHALAF

SECTION: LOCKERBIE : VERDICT ; Pg. 4

LENGTH: 315 words


Until the summer of 1998, the handover by Libya of Abdel Basset Ali Mohammed
al-Megrahi and Lamen Khalifa Fhimah seemed a remote prospect. Ten years after
the Lockerbie bombing, the United Nations sanctions imposed on Libya in 1992 to
force its surrender of the Libyan agents, were being eroded.

With the international community's policy against Libya at risk of collapse
London was able to convince the US, which had been under intense pressure from
the families of the victims, to agree to Colonel Muammer Gadaffi's proposal that
the suspects be tried in a neutral country.

In August 1998 the US and the UK agreed on a trial in the Netherlands but under
Scottish law.

The policy change put the Libyan leader to the test. It won instant support from
Arab countries and encouraged Saudi Arabia, Egypt and South Africa to explain
the merits of co-operation to the Libyan regime and to negotiate terms of the
deal.

Col Gadaffi sought assurances that the case would not lead to the indictment of
the regime or to charges against him. According to UN resolutions, the handover
of the suspects was to lead only to a suspension of sanctions, with a permanent
decision after the trial.

According to diplomatic sources, the colonel was provided with assurances in a
letter from Kofi Annan, the UN secretary general, that the trial would not
undermine the Libyan regime.

It was also made clear to Col Gadaffi that a re-imposition of sanctions would be
virtually impossible since support for a new security council resolution would
be unlikely.

In March 1999, Col Gadaffi agreed to surrender the two accused for trial, at the
same time six Libyans were found guilty in absentia in France for the 1989
bombing of a UTA flight over Niger.

The UN suspended the sanctions and the European Union lifted its embargo, except
on military sales. By July 1999, the UK had resumed diplomatic ties with Libya.

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                        Financial Times (London,England)

                           February 1, 2001 Thursday
                                London Edition 2

LOCKERBIE VERDICT: No end in sight to the trials of victims' families THE REAL
LIFE SENTENCE:

BYLINE: By IAN BICKERTON and MARK NICHOLSON

SECTION: LOCKERBIE VERDICT ; Pg. 4

LENGTH: 477 words

DATELINE: CAMP ZEIST and LOCKERBIE


Lamen Khalifa Fhimah left Camp Zeist yesterday for an unknown destination a free
man, 12 years after the bombing of Pan Am flight 103 claimed the lives of 270
people.

For the relatives of the victims, the task now is to rebuild lives changed
forever by the events of December 21 1988. For many it will prove difficult, if
not impossible.

It took only a matter of minutes for presiding judge Lord Sutherland to deliver
his verdict but the tension took its toll.

Dr Jim Swire, who leads the UK Families Association representing victims,
fainted and had to be carried out of the courtroom. Dr Swire, a family doctor,
lost his daughter, Flora, in the bombing.

In the dock there was no sign of emotion. Abdel Basset Ali Mohammed al- Megrahi,
Mr Fhimah's co-defendant, rocked in his chair as he was found guilty of carrying
out the bombing.

Since dawn a blanket of fog had shrouded the former military base at Camp Zeist,
outside Utrecht, in the Netherlands, where, for 38 weeks, the case has been
heard under Scottish law.

Bruce Smith, who lost his wife Ingrid, spoke for many of the US victims'
families, when he said: "It is small consolation to us but most relatives were
enormously grateful to have at least one guilty verdict."

Relief was, however, tempered by disappointment at the sentence. Peter
Lowenstein, from New Jersey in the US, said: "Twenty years is outrageous. That
works out at less than one month per life."

Despite 10,000 pages of testimony from countless witnesses, for some relatives
too many questions still hung in the biting cold air.

Rozy Vojdany Aalam, who lost a brother, said: "I did not believe they were the
originators of the crime. I don't think I could have heard any verdict that made
a difference to my feelings."

Brian Flynn, who also lost a brother, called for UN sanctions against Libya to
be restored. "Justice has been done. But the fact that the judges ruled that he
(Mr al-Megrahi) acted in concert with others and for Libyan intelligence is a
huge win for the families and we look forward to the actions that will follow
now."

Few in Lockerbie believed the trial's verdict had ended the search for whoever
was ultimately culpable for the bombing. "There'll always be concern that the
perpetrator of this atrocity has been found but the person or people who issued
the orders to carry out this disastrous act will always be free," said Joe
Meechan, a local district councillor.

Councillors said the town had probably gained some things from the disaster. A
trust fund raised to help the relatives has also contributed to improving some
civic amenities. Many in the town said they had built new friendships with
families of the aircraft's victims. And 22 Lockerbie students have enjoyed
scholarships to Syracuse University in the US from a bursary created after the
crash - 35 Syracuse students were killed in the disaster.

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                        Financial Times (London,England)

                           February 1, 2001 Thursday
                                London Edition 2

LOCKERBIE : VERDICT: Diplomatic tightrope makes for a case without precedent
LEGAL PROCESS:

BYLINE: By JOHN MASON

SECTION: LOCKERBIE : VERDICT ; Pg. 4

LENGTH: 462 words


Technically, the Lockerbie trial was like any other murder prosecution under
Scottish law; in practice, it was anything but.

Along with the trial itself, the transformation of Camp Zeist military base
outside Utrecht in the Netherlands into one of the world's best- appointed
courtrooms cost some Pounds 60m, borne partly by the US government.

Proceedings were haunted by the diplomatic agreement not to use the trial to
threaten the Libyan leadership. Much of the context in which the two defendants
- both supposedly former Libyan secret service agents - had allegedly operated
had to be avoided.

The prosecution case was limited to proving two things: that on December 21
1988, Pan Am flight 103 had been the target of a terrorist bomb; and that Abdel
Basset Ali Mohammed al-Megrahi and Lamen Khalifa Fhimah were directly
responsible for planting the device. The presumed - but unstated - motive for
Libyan involvement was the 1986 US bombing of Libya.

The central allegation was that the two men used their positions at Malta's Luqa
airport to smuggle the bomb on board an aircraft to Frankfurt. The bomb was
tagged to be transferred on board flight 103 from Frankfurt to New York. The
prosecution presented forensic evidence about the bomb itself, concealed in a
radio-cassette player inside a brown suitcase.

Defence lawyers attempted to shift blame to the Syria-based Popular Front for
the Liberation of Palestine. The original western view had been that Iran had
commissioned the group to bomb flight 103 in retaliation for the shooting down
of an Iranian Airbus by a US warship in the Gulf earlier in 1988.

That theory was abandoned in 1990 in favour of the Libyan connection.

Key prosecution witnesses included Tony Gauci, a Maltese shopkeeper who
identified Mr al-Megrahi as the man who bought clothing allegedly used to pack
around the bomb.

Abdul Majid Giaka, a former Libyan intelligence agent who defected to the US,
testified that a few hours before flight 103 took off he had seen the two men at
Luqa carrying a suitcase of the type in the bombing.

Edwin Bollier, managing director of MEBO, a Swiss company that made timing
devices of the sort used in the bomb, said only Libya was sold such devices.
However, he later conceded that some had been sold to the Stasi, the East German
secret police, in 1985.

Lawyers for the two men focused on a police raid on a PFLP base in Germany in
mid-1988, in which bomb-making equipment was discovered.

A report from an unnamed foreign government purportedly connected the bombing
with five PFLP members operating from Germany, and gave details of the bomb's
manufacture and how it was smuggled on board the aircraft.

Enlightenment was not to come from either of the men accused. Neither entered
the witness box.

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                        Financial Times (London,England)

                           February 1, 2001 Thursday
                                London Edition 2

LOCKERBIE VERDICT: Pattern of behaviour 'showed killer's guilt' JUDGMENT:

BYLINE: By JOHN MASON

SECTION: LOCKERBIE VERDICT ; Pg. 4

LENGTH: 514 words


Evidence against Abdel Basset Ali Mohammed al-Megrahi showed "a real and
convincing pattern" of behaviour which demonstrated his guilt, the three
Scottish judges at the Lockerbie trial ruled.

However, there was insufficient evidence to convict his co-defendant, Lamen
Khalifa Fhimah, despite some of his conduct being suspicious, they said.

The judges also rejected defence claims that Palestinian terrorist groups rather
than Libya had been responsible for the bombing.

They also completely rejected the evidence of one key prosecution witness -
Abdul Majid Giaka, a former Libyan intelligence agent who defected to the US.

Mr Giaka implicated both defendants, notably Mr Fhimah who, he claimed, had
showed him explosives in his desk drawer at Malta airport. However, his account
was improbable and unreliable, the judges said.

They also rejected much of the evidence of another key prosecution witness -
Edwin Bollier, a director of MEBO, a Swiss company that made timing devices.

Part of his evidence belonged "to the realm of fiction, where it may best be
placed in the genre of the spy thriller", they said. However, they accepted he
had supplied Libya with timers of the type used in the bombing.

The judges believed the evidence of Tony Gauci, the Maltese shopkeeper who
identified Mr al-Megrahi as the purchaser of clothing later used to surround the
bomb inside a suitcase.

The identification was central to Mr al-Megrahi's conviction, along with his
links to Mr Bollier and his movements through Malta under a false name shortly
before the bombing.

Most of the case against Mr Fhimah rested on diary entries mentioning baggage
tags and Mr al-Megrahi. The judges said although these were capable of
"sinister" inferences there was no supporting evidence to back claims that this
implicated him. Other parts of the prosecution case against him were speculative
and he should be acquitted, they said.

The judges rejected defence claims that the Popular Front for the Liberation of
Palestine/General Command or the Palestinian Popular Struggle Front had been
involved through cells in west Germany and Sweden.

They said the clear inference was that the conception, planning and execution of
the plot was of Libyan origin. "While no doubt organisations such as the PFLP-GC
and the PPSF were also engaged in terrorist activities during the same period,
we are satisfied that there was no evidence from which we could infer that they
were involved in this particular act of terrorism and the evidence relating to
their activities does not create a reasonable doubt in our minds about the
Libyan origin of this crime."

Mr al-Megrahi, 48, has 14 days to appeal against his conviction. He was jailed
for life with a recommendation he serves at least 20 years. Lord Sutherland, the
presiding judge, told him the period was "substantially less" than the court
would have recommended were it not for his age, and that he will be serving his
sentence in a foreign country - at Barlinnie jail in Scotland.

The prosecution does not have right to appeal against the acquittal of Mr
Fhimah.

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                        Financial Times (London,England)

                           February 1, 2001 Thursday
                                London Edition 3

FRONT PAGE - FIRST SECTION: Lockerbie verdict greeted warmly but sanctions stay

BYLINE: By IAN BICKERTON, JAMES DRUMMOND, JOHN MASON, ANDREW PARKER and RICHARD
WOLFFE

SECTION: FRONT PAGE - FIRST SECTION ; Pg. 1

LENGTH: 214 words

DATELINE: CAMP ZEIST, TRIPOLI and LONDON


The UK and US governments welcomed yesterday's verdict in the Lockerbie trial,
but said sanctions against Libya would only be lifted when Tripoli abided by
outstanding United Nations resolutions.

After 84 days of trial, Scottish judges sitting in a special court in Camp Zeist
found Abdel Basset Ali Mohammed al-Megrahi, a Libyan intelligence officer,
guilty of the 1988 bombing of a Pan Am flight over the Scottish town of
Lockerbie and the murder of 270 people.

They acquitted a second Libyan defendant.

The conclusion of the trial prompted mixed reactions from victims' families, who
are expected to pursue legal action against Libya in the US courts and demand
the UK government set up a public inquiry.

Mr al-Megrahi was sentenced to life imprisonment, which will not be reviewed for
20 years and will be served in Barlinnie prison, Glasgow.

Libya, which played down the outcome of the trial, is expected to appeal against
his conviction.

In the UK, Francis Maude, shadow foreign secretary, endorsed the case for a
public inquiry into the bombing.

But a spokesman for Tony Blair, prime minister, had earlier appeared to rule out
a public inquiry, which could address the issue of whose orders Mr al-Megrahi
was acting on. Lockerbie verdict, Page 4 Editorial Comment, Page 20

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                        Financial Times (London,England)

                           January 31, 2001 Wednesday
                                London Edition 1

NATIONAL NEWS: Lockerbie verdicts to be delivered today LAW TRIAL HAS COST ABOUT
Pounds 60m:

BYLINE: By JOHN MASON

SECTION: NATIONAL NEWS ; Pg. 7

LENGTH: 396 words


The Lockerbie trial will end today when verdicts on the two Libyans accused of
the murder of 270 people killed in the bombing of Pan Am flight 103 above the
small Scottish town are delivered.

Three Scottish judges will announce whether Abdel Basset Ali Mohammed al-Megrahi
and Lamen Khalifa Fhimah, members of the Libyan security services, will serve
life sentences for the largest mass-murder in British history or walk free from
the court.

The announcement of the verdicts will be keenly followed by governments in
Britain, the US and the Middle East. Although Libya has been cautiously welcomed
back into the international community, the reactions of victims' families,
notably in the US and Britain, could prove politically sensitive.

British victims' families are expected to call for a full public inquiry into
how intelligence and airport security services failed to prevent the bombing of
the aircraft in December 1988. US victims' families are expected to resume a
multi-million dollar civil legal action against the Libyan government. Many
relatives are expected to be present in the courtroom to hear the verdicts
delivered.

The eight-month trial, held at a special Scottish court in the Netherlands, has
been unique. Libya agreed to surrender the two men to stand trial after the
imposition of economic sanctions by the United Nations.

In return, it was agreed the trial would take place in the neutral venue of Camp
Zeist, a former military base near Utrecht. It was also agreed the trial would
concentrate on the roles of the two defendants and not deal with any role played
by the Libyan government. The trial has cost about Pounds 60m, much of which has
been paid by the US government.

The prosecution has claimed the two men used their positions at Malta's Luqa
airport to smuggle the bomb on board an aircraft bound for Frankfurt. The
suitcase containing the bomb was tagged to be transferred on to flight 103 from
Frankfurt to New York.

During the trial, defence lawyers argued the explosion was the responsibility,
not of Libya, but the Syrian-based Popular Front for the Liberation of
Palestine. However, the defence's ability to argue this was limited after Syria
refused to co-operate with their investigations.

If convicted, the Libyans will be given mandatory life sentences which they will
serve in a special unit inside Barlinnie prison, Glasgow.

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                        Financial Times (London,England)

                           January 31, 2001 Wednesday
                                London Edition 1

INSIDE TRACK: Team-builder who relishes tight corners: UNDER THE SKIN DAVID
JAMES: The veteran corporate troubleshooter has fond memories of being bombed in
Libya - but cannot tolerate 'dress-down' Fridays. He talks to Alison Maitland

BYLINE: By ALISON MAITLAND

SECTION: INSIDE TRACK ; Pg. 15

LENGTH: 1044 words


David James is one of the UK's best-known corporate rescue specialists. Brought
in last September to save the Millennium Dome from premature closure, Mr James,
63, is still busy winding up the business from a windswept Portakabin at the
Greenwich site. Already, Railtrack and Equitable Life have been mentioned as
possible next assignments.

In his long career as a troubleshooter, Mr James helped MI6 unravel the Iraqi
supergun affair after a member of his team uncovered suspect parts at a
subsidiary of Eagle Trust, the company he was chairing. He was caught up in the
1986 US bombing raid on Libya while negotiating the release of 12 British
hostages who worked for a subsidiary of Central & Sheerwood, an industrial
holding company. Other corporate missions have included Dan-Air, British Shoe
Corporation - a subsidiary of Sears, the retail group - and LEP, a security and
logistics company.

Mr James, the son of a caterer, abandoned early plans to enter the Church. He
worked for Lloyds Bank and Ford before finding his metier at Cork Gully,
specialists in corporate insolvency, in the early 1970s. He is a workaholic
bachelor, whose passions are the arts, horse-racing and cricket.

I have a very restricted social life. I don't know many people outside the
working world. So the people in the working world are hugely important. They're
a sort of surrogate family. I'm coming home when I come to work.

The people who have come (to the Dome) with me worked with me before. We've
become a very close-knit group. Nobody survives who has not delivered and been
seen to deliver. They have to be almost impervious to stress. It is not unusual
for us to do three days and two nights without stopping.

I probably have less talent than any other single member of the team. But my
talent is that I provide the glue that holds them together.

The Libyan affair (gave me) the best two weeks of my life. I've never felt
closer to a group of people, nor have I ever felt such tremendous mutual
support. We had a business that had a subsidiary trading with Libya. The whole
staff had been taken hostage. I went out to try to sort it out, little knowing
that what they were inadvertently building was supposed to be Abu Nidal's
training camp. The CIA decided to bomb it in the raid that Ronald Reagan
unleashed on Libya as part of his anti-terrorist activity. We were swept up by
the Revolutionary Guard and herded on to the beach. Never have I had anything
that got the adrenaline flying the way that did.

In most situations, I have to hit the board running on day one and move in with
a commando squad that can take control of the balance sheet, the cash. You want
totally committed, trained, experienced treasury people. I have specific
partners at PwC who will give me that support. I equally have partners almost on
full-time assignment to me at Berwin Leighton, the solicitors.

Relationships that have stood up under fire will stand the strain again.
Government is naturally suspicious of relationships. They like complete
arms-length independence. I admit that has been the biggest single issue I've
had to cope with here. There is no way I'd want to work with strangers on an
issue like this.

Linda (Thomas, his personal assistant) has been with me for nearly 18 years.
Aversion therapy is not working in her case. She knows where all the bodies are
buried in my life and she runs the world around me. I'm a live-alone bachelor,
so Linda is essential for keeping my life organised.

I get very single-minded. At times I forget that the people here have a problem
I don't have. They go home stressed out from this place to find grumpy wives and
children who haven't had quite as much time from them as they were expecting.

P.Y. (Gerbeau, the Dome chief executive) said to me: "We've learnt a hell of a
lot from you but you've learned from us too: we've taught you warmth." I said:
"I don't think that's the case. I'm probably a bit shy at the beginning but I
always end up with a great deal of identification with the people."

My close colleague John Darlington says I have one big problem: I don't come in
tough enough in my first week. "People think: he's going to kick us all around
and fire most of us; it's going to be dreadful. Instead, you come in, you're
very relaxed, you get everybody to tell you about the business and impress upon
them how much you want them to work with you. They think: this guy's a softie.
The old guard think they're going to be left in peace." By the second week I've
decided they're too stupid to get in line. I have to spend my second week being
three times harder than if I'd come in at the right level in the first place.

I've got no status hang-ups. It's what you do and how it hangs together that
counts. But my lawyers know they'll lose the account the day I get one
"dressed-down" colleague at a Friday meeting. I will not have it: I do not know
who we're going to have to bring in to those meetings from the banks and
institutions or where we're going to have to go. I will not go around with a
bunch of scruffy-looking tramps.

We (company doctors) are the last of the dinosaurs. The market has been so
stable and the lack of big rescues has meant you haven't had to train another
generation. The most enlightened banks are moving towards intensive business
care to address problems before they boil over.

Also, 20 years ago pretty well every big rescue was led by a British clearing
bank. With cross-border syndicated loans growing, the emphasis has shifted
towards international rescues. I've worked with the Manhattan rescue community
and I deplore it.

It's usuriously profitable for its exponents and ultimately destructive of
business. It does not bring about a unity of bank support towards a rescue. It
is driven by the need to protect within the lunatic laws of Chapter 11. Rescue
in America is a totally different and largely a rip-off concept.

If I were to take on another project I'd want to know that I had the health to
see it through. I'm already the oldest person I know working in the City. I've
seen too many people who have worked beyond their sell-by date. I don't want to
join that club. The biggest challenge is going to be how I adjust to the loss of
my way of life. I'm not very well prepared for it.

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                        Financial Times (London,England)

                           January 31, 2001 Wednesday
                                London Edition 1

COMPANIES & FINANCE UK AND IRELAND: Albert Reynolds takes command at Bula OIL &
GAS MOVE FOLLOWS SURPRISE DEPARTURE OF JOHN HOGAN, CHIEF EXECUTIVE, AFTER FIVE
MONTHS:

BYLINE: By LYDIA ADETUNJI

SECTION: COMPANIES & FINANCE UK AND IRELAND ; Pg. 26

LENGTH: 429 words


Albert Reynolds, the former Irish prime minister, has taken management control
of Bula Resources after the unexpected departure of John Hogan, chief executive
of the small oil and gas exploration company.

Mr Reynolds, who during his tenure as Ireland's Taoiseach was a key figure in
Northern Ireland's peace process, said he would take over as Bula's executive
chairman only as an interim measure. He said the board regretted that Mr Hogan's
appointment had not worked out for either side.

Mr Hogan's departure after just five months in the post came as a surprise to
analysts and the shares were marked down 29 per cent to 1 1/4p.

The company refused to give details, but executives inside the group suggested
the departure followed increasing tension with Mr Reynolds. It is believed that
Mr Hogan had backed one of Bula's non-executive directors, Eonuh Rhee, to
succeed Mr Reynolds as chairman.

Mr Rhee also resigned yesterday to "pursue other interests".

Mr Hogan is thought to have been frustrated with the rate of progress on the
company's negotiations to obtain licences for exploration and development of the
company's interests in Iraq and Libya.

When Mr Reynolds joined the company in March 1999, he brought with him his
diplomatic links in the Middle East and North Africa. At the time, he was
granted options on 87.5m options exercisable at 1p per share.

Mr Rhee, meanwhile, was brought on board early last year partly because of his
experience in Libya. He had previously held a senior position at the Dong Ah
corporation, a Korean civil engineering company that had been involved in big
Libyan construction projects.

Bula is focused on exploration and field development in Libya and Iraq. It said
yesterday that Mr Reynolds would be "actively pursuing the company's interests
in Libya, Iraq and elsewhere in order to enhance shareholder value".

Davy, Bula's house broker, said the management changes would not alter the
group's strategy. "As far as we are concerned the business plan remains intact
and the outlook remains unchanged," it said.

The resignation is the latest in a series of events to stoke media interest in
the company, whose share price has risen and fallen on the basis of rumour and
comment on the web and in the City pages of some UK national newspapers.

Bula, formed in 1981, was initially involved in exploration of the coast of
Ireland and then shifted its focus to Russia before moving on to North Africa
and the Middle East. It was one of a number of small oil companies that floated
on the market during the middle to late 1980s.

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                        Financial Times (London,England)

                           January 31, 2001 Wednesday
                                 USA Edition 2

COMPANIES & FINANCE UK: Former Irish PM takes Bula helm

BYLINE: By LYDIA ADETUNJI

SECTION: COMPANIES & FINANCE UK ; Pg. 25

LENGTH: 256 words


Albert Reynolds, the former Irish prime minister, has taken management control
of Bula Resources after the unexpected departure of John Hogan, chief executive
of the small oil and gas exploration company.

Mr Reynolds, who during his tenure as Ireland's Taoiseach was a leading figure
in Northern Ireland's peace process, said he would take over as Bula's executive
chairman only as an interim measure.

He said the board regretted that Mr Hogan's appointment had not worked out for
either side.

Mr Hogan's departure after just five months in the post came as a surprise to
analysts and the shares fell 29 per cent to 1 1/4p.

The company refused to give details, but executives inside the group suggested
the departure followed increasing tension with Mr Reynolds. It is believed that
Mr Hogan had backed one of Bula's non-executive directors, Eonuh Rhee, to
succeed Mr Reynolds as chairman.

Mr Rhee also resigned yesterday to "pursue other interests".

Mr Hogan is thought to have been frustrated with the rate of progress on
negotiations to obtain licences for exploration and development of interests in
Iraq and Libya.

When Mr Reynolds joined the company in March 1999, he brought with him
diplomatic links in the Middle East and North Africa. At the time, he was
granted options on 87.5m options exercisable at 1p per share.

Mr Rhee, meanwhile, was brought on board early last year partly because of his
experience in Libya. He had previously held a senior position at the Dong Ah
corporation, a Korean civil engineering company.

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                        Financial Times (London,England)

                            January 30, 2001 Tuesday
                                London Edition 1

SHORTS: Britain aims to keep ties with Libya

SECTION: SHORTS ; Pg. 1

LENGTH: 30 words


Britain aims to keep ties with Libya

The Foreign Office said it was determined to maintain Britain's diplomatic
contacts with Libya whatever the Lockerbie trial verdict. Page 5

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                        Financial Times (London,England)

                            January 30, 2001 Tuesday
                                London Edition 2

NATIONAL NEWS: Lockerbie verdict 'will not affect Libyan links'

BYLINE: By ROULA KHALAF

SECTION: NATIONAL NEWS ; Pg. 6

LENGTH: 432 words


The Foreign Officeyesterday underlined its determination to maintain Britain's
diplomatic engagement with Libya regardless of the verdict in the Lockerbie
trial.

As families of the victims await the verdicts on the two Libyans accused of
killing 270 people by planting a bomb on board Pan-Am flight 103, which exploded
above the Scottish town in December 1988, officials insisted that "the verdict
itself has no direct implication for the bilateral relationship".

Even if Abdel Basset al-Megrahi and Al-Amin Khalifa Fahima, the Libyan suspects
now on trial, were convicted, this would "say something about Libya in 1988",
said one official, "but the Libya we're dealing with is that of 2001 . . . our
judgment is done against present behaviour".

The Netherlands court could declare the two defendants guilty, not guilty or
"not proven".

Although a guilty verdict would be seen as confirming suspicions that Colonel
Muammer Gadaffi, the Libyan leader, ordered the bombing, it could also lead to a
lifting of United Nations sanctions against Libya. The sanctions were suspended
in 1999 after Libya handed over the two suspects.

A guilty verdict would lead the UK to engage with Tripoli to ensure that it
fulfils the remaining requirements in UN security council resolutions, including
paying compensation to victims and accepting responsibility for the actions of
Libyan officials.

"The Libyans have indicated that they want to put the sanctions and Lockerbie
behind them, their body language has been that they want to accept the verdict
and move on," said an official.

"We are assuming the Libyans are still operating in a positive spirit, that
they'll co-operate."

The UK resumed diplomatic relations with Libya in July 1999 after a 15-year gap.
The move came after Col Gadaffi handed over the two suspects and the UN
suspended the sanctions. Since then, the Foreign Office has backed trade
missions to Tripoli amid growing European business interest in oil and gas and
infrastructure contracts.

The resumption of ties, however, has not been without controversy. Two potential
ambassadors Col Gadaffi wanted to send to London were deemed unacceptable by the
Foreign Office - which delayed the staffing of the top job at the embassy until
this year.

Most embarrassing was last year's disclosure of an apparent Libyan attempt to
smuggle Scud missile components through Britain.

"We have no illusions about aspects of Libya," said a UK official, adding,
however, that it was in the UK's "overall strategic national interest" to have
dialogue with Tripoli on "several areas of difficulty".

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                        Financial Times (London,England)

                           January 24, 2001 Wednesday
                                London Edition 2

AFRICA, ASIA-PACIFIC & MIDDLE EAST: Fake flowers and sympathies for Kabila

BYLINE: By MARK TURNER

SECTION: AFRICA, ASIA-PACIFIC & MIDDLE EAST ; Pg. 12

LENGTH: 511 words

DATELINE: KINSHASA


Congo yesterdaylaid torest its assassinated president Laurent Kabila with
artificial flowers, at a state funeral attended by the allies and army officials
that many suspect may have had a hand in his downfall.

Leaders and dignitaries filed past and threw bright cloth blooms at his tomb,
following a two-hour service at the Chinese-built People's Palace in Kinshasa.

Mr Kabila was shot in his office last Tuesday by a bodyguard, who was then
immediately shot himself before he could give any explanation. The man-made
wreaths that had surrounded Mr Kabila's casket were lucky to escape the wilting
that the funeral's attendants suffered in Kinshasa's oppressive heat.

Eight senior officers sweated as they struggled to lift the casket from its
satin covered podium - where it had lain in state for two days - on to a waiting
trolly, after which it was placed on a Landrover and whisked to the mausoleum.

It was an affair full of pageantry: a queue of brass bands took turns to belt
out ear-splitting tunes, some mournful, many catchy enough to prompt a little
toe-tapping from attendants.

Heavily-armed Zimbabwean and Angolan soldiers a number with grenades and
toothbrushes sticking from their top pockets, thronged the affair. Two
helicopter gunships buzzed the people's palace, jinking from side to side as
they flew past.

Huge cheers erupted as Sam Nujoma, Robert Mugabe and Eduardo dos Santos, the
presidents of Namibia, Zimbabwe and Angola, arrived to pay their respects.
Frederick Chiluba and Omar el-Bashir, the presidents of Zambia and Sudan, were
also there, as were delegations from Iran, Cuba, Libya and Belgium.

Laurent's son and the new president Joseph Kabila, dressed in a sleek black
suit, watched inscrutably from his red chair behind the podium. Many feel he may
be more open to negotiations with his opponents than his hardline father, with
whom he is said to have had disagreements. But outside the mood grew distinctly
hostile to white foreigners, as journalists were jeered and jostled by the vast
crowds.

Stones were thrown at a Sabena coach carrying officials and reporters
accompanying Louis Michel, the Belgian foreign minister who arrived on the first
leg of a seven-country regional tour. "You killed him, now you come to bury
him," cried one voice. Earlier, a Belgian security official had been detained
after a small tussle with Zimbabwean forces.

They may have been prompted by the state-run l'Avenir newspaper, which has
accused the US and Belgium of instigating the assassination, and planning an
attack upon Kinshasa via Brazzaville with Nigerian and Somali mercenaries.

Mr Michel met Joseph Kabila in the morning, but a spokesman said the meeting did
not constitute recognition of his appointment.

"The only way to get a legitimate government in the Congo is through the
inter-Congolese dialogue," he said, referring to the stalled political process
to be facilitated by former Botswanan President Ketumile Masire.

Joseph Kabila was reported to have replied that his priorities were peace,
reconstruction and "gradual democracy".

LOAD-DATE: January 23, 2001

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                        Financial Times (London,England)

                            January 23, 2001 Tuesday
                                London Edition 2

LETTERS TO THE EDITOR: Cool attitude may benefit UK

BYLINE: By MICHAEL JOHNSON

SECTION: LETTERS TO THE EDITOR ; Pg. 24

LENGTH: 253 words


From Mr Michael Johnson.

Sir, As Richard Wolffe's article makes plain ("Security issues, not ideology,
colour the view from the US", January 19), the new President Bush will do this
country a real service if his more reserved attitude towards Europe, including
the UK, puts an end to the sentimental delusion about a special Anglo-American
relationship that has skewed British policy for so long.

The UK and the US share strong linguistic, historical, cultural, political and
economic bonds and of course it suits British politicians of all stripes to
claim that they get a special hearing in Washington.

But the truth is that, at least since Suez, there has been no special
relationship - or rather, only when it suited the American side and usually for
military reasons (cruise missiles or bombing Libya). Overwhelmingly, US
administrations now expect to deal with the European Union as a whole. When
transatlantic trade disputes break out, the US has usually been only too ready
to include the UK in its retaliation hit-lists. Margaret Thatcher sometimes
understood this, as when in 1982 she stood up to Ronald Reagan over the Soviet
pipeline dispute. Tony Blair has never understood it and William Hague is
evidently determined not to understand it.

If the US now takes a more beady-eyed and interests-based approach to its
relations with Britain, perhaps more of our own politicians will understand
better where our true and immediate interests lie: in Europe.

Michael Johnson, 10 Avenue Road, London N6 5DW

LOAD-DATE: January 22, 2001

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                        Financial Times (London,England)

                            January 23, 2001 Tuesday
                                London Edition 3

INTERNATIONAL ECONOMY: US investigates Iran-China oil deal

BYLINE: By EDWARD ALDEN

SECTION: INTERNATIONAL ECONOMY ; Pg. 15

LENGTH: 335 words

DATELINE: WASHINGTON


The US State Department is investigating a deal reached this month between
Iran's national oil company and a Chinese state-owned oil group to determine
whether it violates US laws that restrict foreign investment in Iran's oil
sector.

A State Department official said yesterday the deal between Sinopec and the
National Iranian Oil Company would be scrutinised under the Iran-Libya Sanctions
Act, a controversial 1996 law that bars foreign companies from investing more
than Dollars 20m (Pounds 13.5m) in any Iranian oil or gas project. The agreement
calls for Sinopec to invest Dollars 150m in upgrading two refineries in Tehran
and Tabriz and building the Neka oil terminal on the western side of the Caspian
Sea

. According to the Iranian news agency, Sinopec bid for the project in October
1998 against companies from the UK, Germany, South Korea, Spain and France.

The official said the US opposed investment in Iran because of its efforts to
acquire weapons of mass destruction, its opposition to the Middle East peace
process and continued human rights violations.

Sinopec is a unit of the China Petrochemical Corporation, the second largest oil
company in China, and has traded on the New York Stock Exchange since its
Dollars 3.4bn initial public offering last October. The company's offering
prospectus made no mention of the Iranian investment.

The Iran-Libya Sanctions Act technically forbids such investments and empowers
the president to levy a broad range of sanctions, including financial penalties
such as denial of US bank loans or credits.

The Sinopec deal could be the first test of whether the administration of George
W. Bush plans to take a tougher approach with respect to the Iran sanctions.

Industry lobbyists in Washington say it is unlikely that the Bush administration
would single out a Chinese company for sanctions after refusing to enforce the
law against European companies.

"Why would they come down on China and ignore all these other infractions?"
asked one lobbyist.

LOAD-DATE: January 22, 2001

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                        Financial Times (London,England)

                            January 19, 2001 Friday
                                 USA Edition 1

SHORTS: Lockerbie judges consider verdicts

SECTION: SHORTS ; Pg. 1

LENGTH: 35 words


Lockerbie judges consider verdicts

The judges in the Lockerbie trial retired to consider their verdicts on two
Libyans accused of killing 270 people by planting a bomb on board Pan Am flight
103. UK, Page 8

LOAD-DATE: January 18, 2001

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                        Financial Times (London,England)

                            January 15, 2001 Monday
                                London Edition 1

COMMENT & ANALYSIS: Topping up in Vienna without fuelling a crisis: Opec must
rescue the sliding oil price without triggering a dangerous rise in energy
costs, says David Buchan:

BYLINE: By DAVID BUCHAN

SECTION: COMMENT & ANALYSIS ; Pg. 23

LENGTH: 1045 words


At the height of the Vienna ball season, a more serious dance comes to the
Austrian capital this week as ministers of the Organisation of Petroleum
Exporting Countries gather on Wednesday to decide how to influence the world's
oil price, and maybe even its economy.

Everyone assumes the cartel, worried about saturation of the oil market ahead of
this spring's seasonal downturn in demand, will make a sizeable cut in its
members' output quotas to sustain the oil price.

Opec's traditional price hawks - Kuwait, Iran and Libya - and smaller producers
such as Qatar, keen to maximise revenues, have talked of a cut of up to 2m
barrels a day in Opec's official production level of 26.7m b/d (which excludes
Iraq, subject to United Nations sanctions). Saudi Arabia, Opec's largest
producer, has spoken of a 1.5m b/d reduction. Even Bill Richardson, the US
energy secretary who, ahead of Wednesday's meeting, has been lobbying Opec
ministers to keep the oil taps open, yesterday conceded the inevitability of a
cut that he hoped would be "as small as possible".

Talk of cuts has done a bit more than stop the sharp slide from last October's
peak of Dollars 35 for a barrel of Brent to under Dollars 25 late last month. At
last Friday's market close, New York's West Texas Intermediate had rallied to
Dollars 30, London's Brent had revived to nearly Dollars 26, while the basket of
Opec members' generally poorer quality crudes was back about Dollars 24.

This well-established price spread reflects quality and transport discounts for
different crudes, but can lead to confusion between consuming and producing
countries. Mr Richardson and his United Arab Emirates counterpart, for instance,
could apparently agree at the weekend that Dollars 25 was a reasonable price for
oil, but evidently had in mind crudes whose prices actually differed by Dollars
6 a barrel.

The market has already factored an Opec cut into current prices for oil. But if
on Wednesday Opec somehow overdoes the reductions, it could send the oil price
shooting up again and tip the world economy into recession. The US Federal
Reserve cited energy prices, of which oil is the leading indicator, as one
reason behind its recent half-point cut in interest rates. But there are limits
to which the Fed and other leading central banks can, or should, accommodate
further energy price rises in their monetary policies.

If, on the other hand, Opec does not cut output enough, the oil price will
continue to slide. This would help the world economy. On the assumption of an
average Dollars 25.3 price for Brent this year (compared to Dollars 28.4 last
year), the London-based Centre for Global Energy Studies estimates that world
oil consumption could increase by 1.25m barrels a day this year, compared to a
1.1m b/d rise in 2000. But lower prices would pose serious problems for Opec
countries and for the international oil companies. The latter are planning a 19
per cent increase in their spending on exploration and production this year. The
companies all claim to be soberly basing new spending on oil prices of Dollars
14-Dollars 16, but would be dismayed if prices really fell to that level.

"Trying to set oil prices is like driving a car facing backwards," says Peter
Caddy, an oil market expert with Petroleum Argus publications. Opec producers
will inevitably look back at the extraordinary combination of events in
December, when Iraq in its disputes with the UN effectively cut its production
by 1.3m b/d, and still the oil price went down. Iraq's fellow Opec members took
this as clear proof that the market was over-supplied. But there were other
factors behind December's price decline, such as an end to panic buying by many
Asian oil importers.

Sheikh Ahmed Zaki Yamani, the former Saudi oil minister, last week counselled
Opec to watch what the Iraqis do and then take action. This is easier said than
done. It would be highly convenient for the rest of Opec if Iraq, which is still
shipping only a portion of the 2.3m b/d it was producing last November,
continues to bear the brunt of cuts. But no one really knows what Baghdad is up
to, and its Opec partners may be still be left guessing if reports that Iraq
will not be represented at ministerial level in Vienna are true.

Opec should also look beyond Baghdad to the state of world oil stocks, says
William Ramsay, deputy director of the Paris-based International Energy "If you
only focus on prices, you can end up taking policy decisions that come back and
bite you," he warns. The IEA, set up by industrialised oil-importing countries
as a counterpoint to Opec, ac-cepts "some reduction (in Opec production) might
be appropriate" towards the summer, he says. But his message to the ministers in
Vienna is "don't be in such a hurry to reduce (output) until stocks are higher".
Where a couple of years ago IEA countries had stocks to cover 58 days of oil
consumption, this is now down to 52 days' worth. Lower stocks also increases
market volatility and price swings, which is bad for consumers and producers
alike.

Such warnings appear to have fallen on deaf ears. This is particularly striking
in the case of Saudi Arabia, the world's biggest oil producer and traditional
price moderate. With unusual directness, Saudi Arabia has backed its talk of a
production cutback by announcing a reduction in February deliveries to some big
western customers. "This is a terrific change in how the Saudis do business",
says Peter Gignoux, a trader with Salomon Smith Barney. But he cautions an
official cut might be less than it seems because some Opec countries are
under-producing; the IEA believes that Opec is producing 300,000 b/d less than
the 3.7m b/d total increase it announced last year.

The Vienna meeting might also allow the Saudis to take a swipe at the outgoing
Clinton administration. As US energy secretary, Mr Richardson has made a habit
of high-profile lobbying trips around Opec producers. But this one coincides
with rising Arab criticism of how the Clinton administration handled the
Israel-Palestinian dispute. If the Saudis endorse a big oil cutback this week,
it will look like a poke in the eye for the two Bills - Clinton and Richardson -
even though it will be George W. Bush who will inherit the consequences.

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                        Financial Times (London,England)

                            January 12, 2001 Friday
                                London Edition 1

MIDDLE EAST & ASIA: Shia leader dies in Beirut NEWS DIGEST

BYLINE: By GARETH SMYTH

SECTION: MIDDLE EAST & ASIA ; Pg. 14

LENGTH: 94 words

DATELINE: BEIRUT


Shia leader dies in Beirut

Imam Mohammed Mahdi Shamseddin, Lebanon's leading Shia Muslim cleric, died late
on Wednesday in Beirut, two weeks after returning from cancer treatment in
Paris.

Imam Shamseddin, 66, took over the Higher Shia Council in 1978, after Imam Mussa
Sadr, its founder, disappeared during a trip to Libya. He became the council's
president in 1994.

In 1983 he called on all Muslims to conduct "comprehensive civil opposition" to
Israeli occupying forces, and in 1985 declared a defensive jihad (holy war)
against Israel. Gareth Smyth, Beirut

LOAD-DATE: January 11, 2001

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                        Financial Times (London,England)

                           January 11, 2001 Thursday
                                London Edition 1

LETTERS TO THE EDITOR: Foolish to make friends again with rogue states

BYLINE: By ALAN TONELSON

SECTION: LETTERS TO THE EDITOR ; Pg. 22

LENGTH: 172 words


From Mr Alan Tonelson.

Sir, All Americans should thank Philip Stephens for the potential strategic
warning he provided in "Vulnerability of a superpower" (January 5). Worried
about stronger US demands for defence burden-sharing and even a "US retreat from
its bases in Europe" (even though the Bush national security team consists
entirely of staunch Nato supporters), Mr Stephens suggests that the US's allies
might respond "sanely . . . by deciding it was prudent to be friends again with
Iran, Libya, even Iraq".

Aligning with rogue states rather than devoting more resources to Europe's own
defence - now there's a formula for foreign policy success! Nonetheless, if such
thinking really exists in European diplomatic circles - as Mr Stephens is surely
hinting - better that the US finds out now. For nothing could be more dangerous
for Americans than to continue linking US security to any governments this
foolish.

Alan Tonelson, Research Fellow, US Business and Industry Council, 910 16th
Street NW, Washington, DC 20006, US

LOAD-DATE: January 10, 2001

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                        Financial Times (London,England)

                           January 11, 2001 Thursday
                                 USA Edition 2

US AND CANADA: Clinton reduces export curbs on computers

BYLINE: By EDWARD ALDEN

SECTION: US AND CANADA ; Pg. 5

LENGTH: 478 words

DATELINE: WASHINGTON


The Clinton administration yesterday sharply reduced export restrictions on
high-performance computers after an internal government review concluded such
controls were no longer effective in discouraging weapons proliferation.

The move, in the waning days of the administration's term, represents the
clearest statement yet that the US intends to abandon nearly all export controls
on computer hardware. Such controls, in place since the cold war, are intended
to prevent adversaries from acquiring computers that could aid in the design of
sophisticated nuclear or conventional weaponry.

But US computer makers have long argued that the controls are costly and hamper
US computer exports without enhancing US security. The administration said
yesterday that it now agrees.

"The administration has concluded that there are no meaningful or effective
control measures for computer hardware that address the technological and
marketplace challenges identified," the White House said.

The announcement followed an extensive inter-agency review launched in late
1999. The US Defence Department, which has traditionally favoured controls on
hardware, reversed that position and concluded the focus should be solely on
protecting classified software in weapons design.

Advances in computing power have been such that an ordinary modern workstation
is more powerful than the supercomputers that were used to design the entire US
nuclear weapons arsenal. The ability to cluster lower-speed computers in a
network that effectively mimics a supercomputer has also made it more difficult
to maintain effective controls.

"The real key is in the software and the know-how, and that's not transferred
when you sell somebody a box," said Dan Hoydysh, director of trade policy for
Unisys, the US information technology company.

The US has eased controls on computers six times since 1993. The White House
said it would have preferred to eliminate most hardware controls entirely, but
was prevented by congressional legislation.

Instead, the US will raise by three times the power of computers that can be
exported without a government licence to countries such as China, Vietnam, India
and Russia.

The new threshold is set at roughly the level of computing power achievable
through an easily assembled network of desktop computers, but below the power of
high-end servers.

The administration said it would eliminate all controls to Latin America, South
Korea, Asean countries, Slovenia and most of Africa. Computer exports will still
be prohibited to Iraq, Iran, Libya, North Korea, Syria and Sudan.

The Clinton team will also recommend to Congress a longer-term strategy for
ending controls based on computing power. The proposal is likely to be resisted
by some Republicans, who have charged that lax US export controls have led to
the transfer of weapons technology to China.

LOAD-DATE: January 10, 2001

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                        Financial Times (London,England)

                            January 9, 2001 Tuesday
                                Japan Edition 1

SHORTS: Lockerbie trial nears end

SECTION: SHORTS ; Pg. 1

LENGTH: 28 words


Lockerbie trial nears end

The trial of two Libyans accused of the bombing of Pan Am Flight 103 over
Lockerbie, Scotland, heard its last evidence. Britain, Page 12

LOAD-DATE: January 8, 2001

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                        Financial Times (London,England)

                             January 5, 2001 Friday
                                London Edition 1

COMMENT & ANALYSIS: Vulnerability of a superpower: The more complete America's
global dominance, the more complex its interests are for George Bush to defend

BYLINE: By PHILIP STEPHENS

SECTION: COMMENT & ANALYSIS ; Pg. 19

LENGTH: 1120 words


The trouble with empires is that they have too many frontiers. Face down the
Visigoths and Vandals and along come the Hunnic hordes. Contain the Celts and
confront the Angles and the Saxons. The barbarians are forever at the gates.

The American empire is different. In the 21st century, it is no longer necessary
to occupy land to project power. Yet the economic and military hegemony of the
US is no less real for the absence of extended geographical boundaries. And,
just as the US is now uniquely powerful, so, like many of its predecessors, it
feels uniquely vulnerable.

As the single superpower and the engine of the economic process we call
globalisation, America's interests are blind to old-fashioned frontiers.
Everywhere it cares to look, the US has a stake. It might be straightforwardly
geopolitical, as in Europe, the Middle East or the China seas. Sometimes what
matters is the success of US businesses or, in times of financial turmoil, the
solvency of Wall Street's banks. Always, however, there is an interest.

We can see too another characteristic of more traditional empires. The greater
its sway, the more the US frets about its security. Scarcely more than a decade
ago, it lived with a finger on the nuclear button. In the shadow of the Soviet
threat, extreme risk was an unavoidable fact of life.

Effortless superiority has engendered a different psychology. America's
unchallenged might must insulate it from the smallest dangers. The sharper its
military edge, the more certain it must be that its citizens are safe and its
armed forces exempt from the grim reality of warfare. It must bomb from
15,000ft, fire from miles behind the battlefield.

Here is the conundrum facing George W. Bush's incoming administration. The more
complete America's global dominance, the more complex, entangled and extensive
its national interests. The more, in short, it has to lose.

Take the tenor of a recent report from the Central Intelligence Agency on
prospects for the next decade and beyond. It starts on an upbeat note: "US
global economic, technological, military and diplomatic influence will be
unparalleled among nations as well as regional and international organisations
in 2015."

Then come the buts. Adversaries, real and potential, will not acquiesce. Nor,
when their interests conflict, will allies. Opponents will not confront the US
head on. Instead "they will try to circumvent or minimise US strengths and
exploit perceived weaknesses". Rogue states, international terrorists and
criminal conspiracies will all threaten the US "homeland". The advanced
technologies that have given the US its pre-eminence will soon arm its enemies.

The CIA calls these "asymmetric" risks but warns that the proliferation of
weapons of mass destruction makes them no less deadly for that. Its judgment
(this one perhaps tailored to self-interest) is that the US will be more
vulnerable to missile attack in the next 15 years than it was during the cold
war.

The response thus far of Mr Bush and his close advisers has been to promise
clarity in foreign policy. The new administration will give sharper definition
to "the national interest". It will focus on the big geostrategic relationships
- particularly with Russia and China. It will avoid imperial overstretch by
disavowing humanitarian interventions. It will expect Europe to deliver more of
its own security. It will build a National Missile Defence and advance US
military superiority in space. And it will halt the tide towards global
governance by applying a strict national interest test to multilateral
entanglements.

As Condoleeza Rice, who will serve as Mr Bush's national security adviser, has
put it: "American foreign policy in a Republican administration should refocus
the US on the national interest and the pursuit of key priorities." This chimes
with the doctrine of Colin Powell, the secretary of state-designate, that the US
should deploy its military only when victory is more than certain and the risk
of casualties minimal.

General Powell personally opposed the decision to go to war against Iraq in 1991
and, more vehemently still, US intervention in the Balkans a few years later. He
has promised a review of all deployments overseas.

There is a seductive simplicity here. Those who worry now about an isolationist
White House have often been among the critics of US imperialism. If America
draws its frontiers more tightly, who are its allies to complain?

Here, though, lies the snag for Mr Bush. In opposition, it is always easy to
draw straight lines. In power, they soon become blurred and tangled by
realities. Of course, one can produce a shortlist of the trends - Russia's
response to decline, a more assertive China, deadly stalemate in the Middle East
- most likely to impact directly on US security. But developments elsewhere
cannot be neatly divided between those that impinge on America's national
interest and those to be safely ignored.

Take the Balkans. Nothing would be easier than to withdraw the 10,000 US troops
in Bosnia and Kosovo. Nor, for that matter, to begin bringing the GIs home from
their bases in western Europe. Let the Europeans police their own continent.

But how would Washington feel if Moscow stepped back into a Balkan chaos? How
far would US security be enhanced if its allies responded, sanely, to a US
retreat from its bases in Europe by deciding it was prudent to be friends again
with Iran, Libya, even Iraq? How, as it focuses on a few big issues, will a Bush
administration persuade its enemies (and friends) to halt the proliferation of
lethal technologies? How safe will America be behind its star wars shield if
Russia sells its missile blueprints to the highest bidder?

There are scores of issues - from Afghanistan's opium crop to the health of
Argentina's banks - where narrow national interests cannot be separated from
those of a wider international community.

The global financial stability promoted by institutions such as the
International Monetary Fund is not driven by misguided notions of international
philanthropy or world government. It serves US prosperity.

These interdependencies are set to become even more complex. As the CIA says:
"States will continue to be the dominant players . . . but governments will have
less and less control over the flows of information, technology, diseases,
migrants, arms and financial transactions across their borders." In other words,
we will need more, not less, international governance.

Bill Clinton's conduct of foreign affairs was imperfect. But after a time he
understood two important things. For those who rule an empire, domestic and
foreign policy are indivisible. And the American empire has a thousand
frontiers.

LOAD-DATE: January 4, 2001

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                        Financial Times (London,England)

                           January 3, 2001 Wednesday
                                London Edition 1

INTERNATIONAL ECONOMY: Saudi call for production cuts fails to lift oil prices

BYLINE: By DAVID BUCHAN and RUTH SULLIVAN

SECTION: INTERNATIONAL ECONOMY ; Pg. 13

LENGTH: 447 words

DATELINE: LONDON


Saudi Arabia, Opec's leading producer, yesterday called for a large cut in the
cartel's oil production later this month, but the move produced only a brief
rally in the oil price.

The Saudi call for a cut of 1.5m barrels a day appeared to convince the oil
markets that Opec would reduce its members' production quotas when it meets in
Vienna on January 17, but that this would not necessarily halt a continued slide
in the oil price from last October's peak of Dollars 35.

After a weekend meeting of the Gulf Co-operation Council, which also includes
the Opec members Kuwait, the United Arab Emirates and Qatar, a Saudi official
told the Reuters news agency that GGC leaders had told their ministers "to do
whatever was needed to achieve the targeted price of Dollars 25 for the Opec
basket". To achieve this, a cut of 1.5m barrels per day (bpd) would be needed,
the official judged.

The size of the proposed cut took some traders by surprise. "It is a dramatic
proposal as we had been expecting calls for cuts of 1m barrels a day," said
Peter Gignoux, a trader at Salomon Smith Barney. Nonetheless, the Saudi call
failed to shake market belief in adequate or even excessive world oil supplies.

Brent February futures on London's International Petroleum Exchange rose 98
cents to Dollars 24.90 in mid-afternoon trading before falling back to Dollars
24.46 later in the afternoon, while on the New York Mercantile Exchange, oil
futures jumped 54 cents to Dollars 27.34 a barrel in morning trading before
falling back to Dollars 26.87 at midday.

Other members of the 11-nation Opec cartel, including Iran and Venezuela and
Libya, have already noted the need for oil production cuts to pre-empt the
seasonal decline in consumption next spring.

Therefore agreement on cuts this month is considered highly likely. The US has
put pressure on Saudi Arabia, as Opec's swing producer, to maintain oil output,
but Washington's leverage will be weakened by the imminent change of US
administration.

The Saudi official's reference to a target of Dollars 25 for the Opec basket
implies a higher price for the Brent benchmark crude. Traditionally at a quality
discount to Brent, the Opec basket composed of the crude oils of the cartel's
producers traded all last week at less than Dollars 22 per barrel.

A cut of 1.5m barrels a day would reduce production for the 10 Opec members with
quotas by about 5 per cent to just over 25m barrels a day.

Iraq is not covered by Opec quotas, because it is restricted by United Nations
sanctions. However, fresh problems with Iraq, coupled with severe cold in the
US, could yet spur an increase in oil prices, market traders said. Oil stumbles,
Page 32

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                        Financial Times (London,England)

                           January 3, 2001 Wednesday
                                London Edition 1

FRONT PAGE - COMPANIES & MARKETS: Saudis seek big cut in oil output

BYLINE: By DAVID BUCHAN and RUTH SULLIVAN

SECTION: FRONT PAGE - COMPANIES & MARKETS ; Pg. 21

LENGTH: 446 words

DATELINE: LONDON


Saudi Arabia, Opec's leading producer, yesterday called for a big cut in the
cartel's oil production this month, but the move produced only a brief rally in
the oil price.

The Saudi call for a cut of 1.5m barrels a day appeared to convince the oil
markets that Opec will reduce its members' production quotas when it meets in
Vienna on January 17, but that this would not necessarily halt a slide in the
price from last October's peak of Dollars 35.

After a weekend meeting of the Gulf Cooperation Council, which also includes
Opec members Kuwait, the United Arab Emirates and Qatar, a Saudi official told
the Reuters news agency that GCC leaders had told their ministers "to do
whatever is needed to achieve the targeted price of Dollars 25 for the Opec
basket".

To achieve this, a cut of 1.5m barrels per day would be needed, the official
said.

The size of the proposed cut took some traders by surprise.

"It is a dramatic proposal, as we had been expecting calls for cuts of 1m
barrels a day," said Peter Gignoux, a trader at Salomon Smith Barney.

However, the Saudi call failed to shake market belief that world oil supplies
are adequate or even excessive.

Brent February futures on London's International Petroleum Exchange rose 98
cents to Dollars 24.90 in mid-afternoon trading before closing at Dollars 24.30.

On the New York Mercantile Exchange oil futures jumped 54 cents to Dollars 27.34
a barrel in morning trading before falling back to Dollars 26.87 at midday.

Other members of the 11-nation Opec cartel, including Iran, Venezuela and Libya,
have already stressed the need for production cuts to pre-empt the seasonal
decline in oil consumption next spring, making agreement on cuts this month
highly likely.

The US has increased pressure on Saudi Arabia to maintain oil output, but
Washington's leverage will be weakened by the imminent change of administration.

The Saudi official's reference to a target of Dollars 25 for the Opec basket
implies a higher price for the Brent benchmark crude.

The Opec basket, composed of the crude oils of the cartel's producers,
traditionally sells at a quality discount to Brent. It traded all last week at
under Dollars 22 per barrel.

A cut of 1.5m barrels a day would reduce production for the 10 Opec members with
quotas by around 5 per cent to just over 25m barrels a day, about a third of
world production.

Iraq is not covered by Opec quotas, because it is restricted by United Nations
sanctions.

However, fresh problems with Iraq, which has not loaded oil since December 31,
coupled with severe cold in the US, could yet spur an increase in oil prices,
traders said. Editorial comment, Page 18 Commodities, Page 32

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                  December 30, 2000, Saturday London Edition 1

EUROPE: Yugoslav regime recalls brother of Milosevic

BYLINE: By IRENA GUZELOVA

SECTION: EUROPE; Pg. 7

LENGTH: 375 words

DATELINE: BELGRADE


The brother of Slobodan Milosevic, ousted Yugoslav president, was officially
recalled from his position as ambassador to Moscow yesterday, as were 16 others
appointed by the old regime.

Among them were ambassadors to Libya, Israel and Macedonia, important trading
partners or transit routes for money laundering.

Yugoslavia's almost exclusive reliance on Russian gas and its large imports of
crude oil via Bulgaria made Borislav Milosevic's role one of the most important
in the Yugoslav foreign ministry.

Borislav's role came to the world's attention when Slobodan's son Marko made a
speedy getaway to Moscow following October's revolt, and his uncle helped him
secure a haven in the Russian capital.

The decision is the latest personnel change in Yugoslavia's government after
October's popular uprising overthrew Mr Milosevic's regime.

Borislav and his colleagues, who were strong Milosevic supporters, are expected
to return to the country by January 15, and their replacements appointed early
in the new year.

But Zoran Lilic, a former Milosevic associate and Yugoslav president in the
mid-1990s, says the ousted leader and his allies will continue to exercise power
in the foreign ministry through their Montenegrin partners, the Socialist
People's party, or SNP, which holds the balance of power in the federal
parliament.

The democratic alliance which spearheaded October's revolt failed to secure a
majority in the federal parliament and was forced to form a coalition with the
Montenegrins, who are Serbia's junior partners in the Yugoslav federation, to
defeat Mr Milosevic's Socialist party.

As a result, the SNP controls 22 out of 73 ambassadorial positions in some of
the most important missions, including Moscow, Baghdad, Caracas and Minsk - oil
exporters or places cited as stop-off points via which the former regime is
alleged to have siphoned state-owned assets to bank accounts held as far away as
China.

SNP members will also fill posts in Tokyo, Rome, Ankara and the United Nations
mission in Geneva.

Mr Lilic also said that Milan Milutinovic, Mr Milosevic's ally and fellow war
crimes indictee, remains president of Serbia, though the democratic alliance has
for the time being neutralised his power.

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                   December 22, 2000, Friday London Edition 2

COMPANIES & FINANCE UK AND IRELAND: Lasmo falls into the arms of its Latin
lover: The oil group is swapping partners writeJames Blitz, Andrea Felsted
andDavid Buchan:

BYLINE: By DAVID BUCHAN and ANDREA FELSTED

SECTION: COMPANIES & FINANCE UK AND IRELAND; Pg. 22

LENGTH: 781 words


Having languished unloved earlier this year, Lasmo, the UK oil company, suddenly
seems set to be carried off by its surprise Italian suitor, Eni, and to jilt its
recent US fiance, Amerada Hess.

Beyond spelling an end to the separate existence of one of Britain's last
middle-sized independent exploration and production companies, Eni's agreed
Pounds 2.7bn bid for Lasmo would appear to mark the Italian company's first
significant move in the world oil industry consolidation.

It also raises a question-mark over Amerada Hess. The US company said last night
it would not raise the Pounds 2.45bn bid it had agreed with Lasmo last month.

Paul Murray, finance director of Lasmo, was clear about the merits of the
Italian offer: "It is a better offer for shareholders. It is all- cash, and it
is at a higher level. From a board's point of view, it is a relatively
straightforward change of recommendation."

Vittorio Mincato, chief executive of Eni, was quick to dismiss fears he might
have overpaid for Lasmo.

Despite Eni being the world's sixth largest listed oil company, Mr Mincato said:
"Eni has never before undertaken an operation of this size."

But he said the 200p all-cash share offer - clearly topping Amerada Hess's mixed
cash/share bid - was based on the same "rigorous methods" Eni had used when it
paid Pounds 788m for the much smaller British-Borneo this year.

Under Mr Mincato, and his predecessor Franco Bernade, Eni has increasingly
focused on developing its core oil and gas sectors, shedding chemical and
property interests. But facing competitive pressure in its domestic gas market,
Eni is now embarking on oil acquisitions.

The Lasmo deal will strengthen Eni's position in the UK sector of the North Sea
and in North Africa, where Lasmo's operations in Algeria will complement Eni's
strong position in Libya and Egypt.

But while Lasmo's current production is weighted heavily - 56 per cent - towards
the North Sea, its reserves are far more widely spread, in particular in
Indonesia and Venezuela, where it operates the Dacion field.

A key to the deal's success will be whether Eni can exploit Venezuela's thick
and sulphurous oil, which resembles its own deposits in Italy. The deal will
also give Eni a foothold in Asian gas markets.

Revealing the pressure under which oil leaders now find themselves to prove they
can lift output under the spur of higher oil prices, Eni vaunts the fact that
with 200,000 barrels a day from Lasmo, it will be able to reach production of
1.6m bpd in 2003, ahead of the 1.5m bpd target it set last year.

In terms of cost synergies, the savings projected by Eni of Euros 80m (Pounds
48.7m) a year are less impressive than the Dollars 130m (Pounds 89m) targeted by
Amerada. It was unclear yesterday how much of these savings would come through
job losses.

While Eni's strategy has been clear, its tactics have been less so. Mr Mincato
said yesterday: "Lasmo has been in our sights for a long time." But his bankers
suggest it took the Amerada Hess bid to "crystallise" Eni's interest in Lasmo,
even though the failure of its share price to rise this year with the oil price,
like the rest of the industry, had shown Lasmo's vulnerability much earlier.

Finally, Eni approached Lasmo about two weeks ago. A number of oil companies are
understood to have considered competing against Amerada Hess for Lasmo.

Industry sources said Kerr McGee had thought about making an offer, while
Phillips and Anadarko also examined the possibility of bidding, as did Talisman
and Conoco, which thought the price was too high.

In the event, only Eni did, and at a price which its banking advisers calculated
would be beyond Amerada Hess's means to match.

One side-effect of the Eni deal is that Lasmo will incur a break-up fee of
Pounds 24m, or 1 per cent of the value of Amerada's offer, as well as about
Pounds 10m in advisory fees.

Mr Mincato said Eni would finance the purchase out of cash flow, disposals and a
Pounds 3bn line of credit offered by JP Morgan, which along with Lazards is
advising it. Schroder Salomon Smith Barney is advising Lasmo, and Goldman Sachs
advising Amerada Hess.

Amerada, meanwhile, is left to lick its wounds at losing a deal on which it had
worked for nearly a year. Analysts said its failure to clinch the deal could
make it vulnerable in the consolidation expected among second-tier US oil
companies.

The company said last night it was strong financially, and it would "be on the
alert for (acquisition) opportunities".

Some analysts suggested that the loser in the Lasmo deal might make a bid for
Enterprise, one of the few remaining UK independent oil companies.

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                 December 20, 2000, Wednesday London Edition 2

WORLD STOCK MARKETS: Production rumours boost oil

BYLINE: By JEFFREY BROWN - EDITOR, CHRIS DODD - EDITOR and MICHAEL MORGAN -
EDITOR

SECTION: WORLD STOCK MARKETS; Pg. 50

LENGTH: 1009 words


Overnight strength for leading US shares linked to speculation about Opec
production cuts sent oils to the top end of the FTSE 300 index performance
charts.

Concern about oil price slippage has led to a bout of weakness for the sector
over the past month. However, there was a clear upswing for sentiment yesterday
after Kuwait, Iran and Libya hinted at production cuts early in the new year.

Since the autumn, sector analysts have been predicting average oil prices for
2001 of Dollars 20 a barrel or less. These forecasts may shortly be seen as too
low. "It looks as if the suspected hard landing for the oil price has been put
on hold," said one leading analyst yesterday.

Royal Dutch jumped 4.5 per cent to Euros 65.78 in 13m shares traded. Total Fina
Elf gained 2.2 per cent to Euros 154.

Motor stocks gained ground, partly at the expense of DaimlerChrysler, which ran
foul of sector switching in the wake of another round of negative broker
comment.

Renault, which touched a high for the session of Euros 54.30, ended 6.7 per cent
better at Euros 54 in modest volume of 1.2m shares. Volkswagen added 3.8 per
cent at Euros 53.89 and BMW drove up 5.5 per cent at Euros 36.08.

Monday's downbeat trading statement sparked a predictable wave of broker
earnings downgrades for DaimlerChrysler. Deutsche Bank cut 2001 forecasts by 16
per cent while UBS Warburg savaged its estimates for 2001 by 35 per cent.

"We continue to prefer VW, Renault and Peugeot," says Deutsche Bank. UBS has put
Renault on its Europe-1 list saying that the market has "yet to fully
appreciate" the leverage to Renault's earnings from the accelerated turnround at
Japanese associate, Nissan.

Daimler blow

On DaimlerChrysler, UBS Warburg advises investors to avoid the stock on earnings
valuation and dividend grounds. It feels the dividend for 2000 is most likely
safe but at risk for 2001.

Belgian chemicals and pharmaceuticals group Solvay put on 3.7 per cent to Euros
56.60 on news of a deal with oil giant BP Amoco to boost their polymers
businesses in Europe and the US. The two businesses have a combined turnover of
Dollars 2.6bn.

Solvay rally took it clear of the near two-year low of Euros 52.75 reached last
Friday.

Tessenderlo gave up 3.6 per cent to Euros 31 as KBC Securities downgraded its
recommendation on the stock and cut its share price target to Euros 38 from
Euros 52.

"In spite of the good third-quarter results, we expect lower margins for the
fourth quarter, mainly in the PVC division," KBS said. "Margins are being
weighed down by both raw materials price increases and sales price decreases."

BASF slipped 1 per cent to Euros 47 as Basell, its newly formed chemcials joint
venture with the Royal Dutch/ Shell Group, said it was shutting down 500,000
tonnes of polypropylene capacity worldwide. It said the move, affecting plants
in Germany, the US and the UK, was temporary and was the result of a serious
supply/demand imbalance in the industry.

Bayer put on 1.7 per cent to Euros 54.70 as it unveiled plans for a joint
venture with US Regular world markets updates at www.ft.com/markets.
pharmaceuticals group Lyondell to build and operate a polyurethane factory in
the Netherlands.

Financials were surprisingly mixed as hopes grew for lower interest rates.

The German banks were hit by an early round of profit-taking, but by the close
Deutsche Bank had recovered to trade 1.9 per cent higher at Euros 87.88.
Dresdner edged up 0.1 per cent to Euros 45.41, Commerzbank was barely changed at
Euros 29.65 and Hypovereinsbank was 3.2 per cent lower at Euros 56.95. UBS
managed a 1 per cent gain to SFr264 and CS Group put on 1.8 per cent to Euros
309.

In Paris, BNP Paribas jumped 1.8 per cent to Euros 94.60, Credit Lyonnais
slipped 0.5 per cent to Euros 38.14 and Societe Generale was 1.1 per cent lower
at Euros 64.65.

Telecommunications companies were generally stronger, led by a rise of more than
4 per cent for Deutsche Telekom after it announced that it expected operating
profits at its offshoot T-Mobile to "multiply" next year and customers to grow
to 25m from the current 20m.

Telekom rises

Deutsche Telekom's share price rose from a closing low for the year of Euros
35.63 to about Euros 37 towards the end of the session.

France Telecom also made progress, gaining about 2 per cent to Euros 100.60
after announcing it was selling its 1.8 per cent stake in Deutsche Telekom,
closing a chapter on their strained relations. Last May they agreed to unwind
their crossholdings, which raised hopes among investors that the proceeds would
be used to ease France Telecom's financing needs for third-generation UMTS
mobile services.

But rival French operator Bouygues slipped 1.5 per cent. The construction and
telecoms group is seeking Euros 6bn in loans to finance its bid for a 3G
licence.

Portugal awarded four UMTS licences to the country's three existing mobile
companies and a consortium led by Portugal's electricity utility EDP. Telecel,
controlled by Vodafone, rose 2.6 per cent to Euros 12.90; Portugal Telecom,
which won through its offshoot TMN, rose 2.5 per cent to Euros 10.27, and Sonae,
which won a licence for its offshoot Optimus, slipped 0.8 per cent to Euros
1.32.

In the internet world, France's Wanadoo looked set to continue its spending
spree, with reports that it was to snap up the Dutch internet service provider
Freeler.nl from financial group ING. Wanadoo's share price fell 3.3 per cent to
Euros 8.89 and its rival Liberty Surf fell to a year low of Euros 8.90, down
almost 6 per cent amid renewed worries over its development costs.

Among media companies, Dutch publisher Wolters Kluwer rose 1.1 per cent to Euros
28.31 in spite of paying a hefty premium for the US online legal information
provider Loislaw.com.

EADS, the pan-European aerospace company, rose 3.6 per cent to Euros 21.96 as
Airbus Industrie, of which it owns 80 per cent, launched production of its
555-seater superjumbo. Written and edited by Michael Morgan, Jeffrey Brown and
Chris Dodd

LOAD-DATE: December 19, 2000

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                  December 19, 2000, Tuesday London Edition 2

COMMODITIES & AGRICULTURE: Oil rises on call for output cutback

BYLINE: By CHRISTOPHER BOWE and RUTH SULLIVAN

SECTION: COMMODITIES & AGRICULTURE; Pg. 42

LENGTH: 240 words


Crude oil prices rallied after member states of Opec called for a cut in output
yesterday.

In London, the February Brent contract rose 35 cents to Dollars 26.24 at the
close, after reaching a high of Dollars 26.84 earlier in the session.

In New York, where severe cold weather is continuing to worry the market,
January Nymex rose sharply in late trading, up 89 cents to Dollars 29.76.

Markets firmed as Iran and Kuwait called for cuts of at least a million barrels
per day and Muammar Gaddafi in Libya added his weight. But Bill Richardson, US
energy secretary, said that the cuts would be "unhelpful".

Spot silver hovered around three-year lows as the market felt the loss of a
significant buyer and limited demand increases next year. London silver fixed at
457.50 cents, down from Friday's 461.00 cents.

Eastman Kodak, the US photographic group, cast a shadow over the silver market
last week after it said it had "fully hedged" its silver need for next year.

A spokesman for Kodak said the company has locked in its price for all of its
projected silver use next year. The actions mean that the estimated largest
single buyer of silver will be dramatically less active, if not possibly absent,
in the market next year.

Kodak's use of silver accounts for about 10 per cent of the global demand. The
photographic industry accounts for about 28 per cent of the estimated 877m
ounces of fabrication demand last year.

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                   December 8, 2000, Friday London Edition 1

INTERNATIONAL ECONOMY: Mixed gains for UN after decade of sanctions

BYLINE: By CAROLA HOYOS

SECTION: INTERNATIONAL ECONOMY; Pg. 15

LENGTH: 727 words


The 10 years since the end of the cold war have become known as the Sanctions
Decade at the United Nations' headquarters in New York. Now the world's
diplomats are asking whether this weapon has been effective in enabling global
action, or is merely proof of UN weakness.

Having approved 12 sanctions regimes in 10 years - compared with only two
(against Rhodesia in 1966 and South Africa in 1977) during the first 45 years of
the UN's existence - member states are becoming wary of a policy tool that has
sometimes proven harmful to populations while failing to achieve its goal.

Comprehensive sanctions, such as those imposed on Iraq in 1990 and Haiti in
1993, have had devastating humanitarian effects and are unlikely to be imposed
again.

But so-called "smart" sanctions, which target "rogue" leaders and rebel groups
and aim to prevent civilian casualties, are more often than not proving
ineffective, compromising the credibility of the UN and risking a backlash
against one of the organisation's most important policy tools.

These concerns have become increasingly pervasive at the UN, and dominate
current negotiations over imposing an arms embargo against the Islamist Taliban
government in Afghanistan.

To date, years of sanctions against Iraq, Libya and Sudan have raised concern
among scholars and diplomats that UN measures can fall hostage to the national
policies of its five most powerful members - the US, the UK, France, Russia and
China. This worry has now led to a division among Security Council members over
whether to put a time limit on future sanctions regimes.

The UK and the US argue that imposing a deadline increases the risk that the
offender will wait out the sanctions rather than comply with the demands of the
international community.

France and others maintain that, in the absence of a time limit, the Security
Council risks extending sanctions indefinitely if a deadlock develops within the
council.

David Malone, president of the International Peace Academy, a think-tank that
closely follows UN issues, says: "My concern is that the Afghanistan (sanctions)
regime emerges from a coincidence of interest of the US, the Russian federation
and possibly China in combating Islamic fundamentalism. Most of the rhetoric
heard at the UN on targeting sanctions to avoid the humanitarian impact on
civilian populations has been ignored."

To counter criticism over the social impact, the Security Council last year
began to include humanitarian assessments within its resolutions. A working
group on sanctions will this month issue a separate report on devising "smart"
sanctions regimes.

Also slowing the passage of the Taliban resolution are recurring concerns that
the Security Council loses credibility when it imposes sanctions it cannot
enforce.

Many of the UN's other sanctions, including those affecting Angola, Sierra
Leone, Rwanda, Liberia and Sudan, failed to achieve their goals because of a
lack of enforcement.

"It is pointless for the UN to pretend to pass sanctions - and to only pretend
it is doing something - if it does not do anything," says Paul Heinbecker,
Canada's ambassador to the UN.

This year the Security Council took a large step towards enforcing its sanctions
against the Angolan rebel movement Unita by naming and shaming sanctions
violators. It was especially critical of the international diamond industry,
whose lack of oversight allowed Unita to arm itself through illicit diamond
sales.

The UN move added momentum to an international certification scheme aimed at
keeping conflict diamonds from Angola and war-torn Sierra Leone off the market.

In an effort to combat the ineffectiveness of unmonitored UN sanctions regimes,
Canada this month launched a campaign in the Security Council to create a
permanent monitoring group to keep track of violators.

Many diplomats and UN officials believe an arms embargo against Afghanistan's
Taliban regime could prove only moderately effective.

However, diplomats believe the symbolic benefits of multilateral sanctions and
the influence of the US and Russia will ensure adoption of the Taliban
resolution.

At a time when the world powers are increasingly unwilling to engage in UN
peacekeeping, the UN is now at risk of losing entirely its role in conflict
prevention if it cannot make the sanctions weapon work.

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                   December 6, 2000, Wednesday USA Edition 1

US AND CANADA: US administration faces crisis over energy policy: Whoever gets
to inhabit the White House must face up to the fact that he will have to address
problems not just in oil but in the natural gas sectors, compounded by the
cut-off of Iraqi crude oil, reports Hillary Durgin:

BYLINE: By HILLARY DURGIN

SECTION: US AND CANADA; Pg. 6

LENGTH: 948 words


The alarm in world energy markets triggered by the halt in Iraqi crude oil
exports at the weekend is the latest sign that the new administration - whoever
leads it - will have to make US energy policy a top priority.

Even as the outcome of the presidential election has hung in the balance over
the last few weeks, energy industry officials have argued that the new president
will have to address problems not just in oil, but in the natural gas and power
sectors that reached crisis levels over the past year.

The cut-off of Iraqi crude could have serious repercussions for the US, the
world's largest oil consumer, particularly at a time of exceptionally low
inventories in the world oil markets and shortage in spare production capacity
within the Organisation of Petroleum Exporting Countries. That situation could
easily reach crisis proportions for the US if other circumstances, ranging from
unrest among Nigerian oil workers to cold winter weather across the country,
affect supplies.

"For the new administration, this whole event is going to raise the question of
energy security and US energy policy to the very top of the docket," said Amy
Jaffe, senior energy analyst with the James A. Baker III Institute of Public
Policy at Rice University in Houston.

The Baker institute is working with the Council on Foreign Relations, a New
York-based think tank, to form a taskforce on US energy policy. "Whenever the
new president takes office, he is going to have to cope with whatever the
economic fallout is of this and the economic fallout is going to be huge," Ms
Jaffe predicted.

Opec has only between 1m to 2m barrels per day of spare production capacity -
far less than it has had during previous oil crises. Put in perspective, in the
winter of 1989, colder than normal weather boosted US oil demand by 1.5m barrels
per day.

For the first time in more than two decades, energy has become a focus of public
debate. As energy shortages and high prices stunned the public following a long
period of adequate supplies and cheap prices, these issues became a political
rallying point and figured prominently in theelections.

"There is a direct correlation between interest in energy policy and prices, and
energy prices are high, so interest in energy policy is high," said Robin West,
chairman of the Petroleum Finance Company, a Washington DC-based energy
consultant.

The position of energy secretary has generally been regarded as weak and has
often been occupied by someone with little knowledge of the industry. Whoever
becomes the next secretary must have a good understanding of the industry and be
able to explain the complexities of the regulatory structures and markets to
Congress, Mr West said.

Over the past two years, power shortages and skyrocketing prices have become
more commonplace. The underlying problem, industry executives say, is the lack
of a uniform, national policy to provide competitive, open access to the
nation's electricity power grid.

Current regulations, for example, tend to favour regional power authorities and
utilities in certain regions so that competitors have a harder time getting
power onto the grid and transmitting it. In 1998 that problem triggered, for
example, prices of Dollars 7,500 per megawatt-hour in Ohio compared with
neighbouring states where they were one-fortieth of that level.

Another problem is the difficulty of obtaining permits to site and build plants
in certain states. In California, for example, where shortages have become a
serious problem and the state imports 25 per cent of its power on days of peak
demand, 11,000 megawatts of new power has been proposed but can't get sited.

"The biggest energy policy issue we have is electricity," said Steven Kean,
executive vice-president and chief of staff at Houston-based Enron, the
country's largest merchant of natural gas and power. "Natural gas is not even
close. Oil is not even close." Enron is pushing for legislation to ensure open,
competitive access on the power grid and initiatives that would enable new power
generation capacity to be developed faster and easier.

Closely tied to the problem of power is that of natural gas, which is the
feedstock for virtually all new power generation capacity in the US. Prices,
which are now above Dollars 6 per thousand cubic feet, hit a record high this
week - three times the price of a year ago - as the energy industry has been
unable to keep pace with demand.

Many in the industry are concerned about how the US will be able to meet future
power demands unless more gas is developed. Yet while companies are busy
drilling, they have been hard pressed to increase production.

Companies such as UK-based BP Amoco and Calgary-based Nexen, which have gas
reserves in Alaska and Canada, are hoping that the high prices will make
development and transport of those reserves profitable, but such projects are
probably five years away.

At the top of the energy industry's agenda in accessing more oil and gas are
efforts to reopen more federal lands to drilling. In addition, they would like
to have equal access to oil reserves overseas in places such as Iran and Libya
where sanctions prevent US companies from doing business.

The industry knows that forging a new energy policy will not be easy. But it
realises it must push it to the top of the new administration's agenda.

"It will be a priority," said Chuck Watson, chairman and chief executive officer
of Houston-based Dynegy, a leading energy merchant with large holdings in the
natural gas and power sectors. "It has to happen, if they don't want Dollars 5
natural gas and Dollars 40 crude and Dollars 50 power."

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                        Financial Times (London,England)

                   December 4, 2000, Monday London Edition 2

COMPANIES & FINANCE INTERNATIONAL: Region's violence sends Arab exchanges lower
EMERGING MARKETS MANY AREAS STAGNANT DESPITE RISING OIL PRICES:

BYLINE: By JAMES DRUMMOND

SECTION: COMPANIES & FINANCE INTERNATIONAL; Pg. 34

LENGTH: 742 words

DATELINE: CAIRO


Arab stock markets have moved firmly to the exotic end of the emerging market
spectrum over recent years and, given the violence in the West Bank and Gaza
Strip, the poor performance is not surprising. Lebanon is down 18 per cent on
the year while Jordan has fallen 20 per cent.

But Arab markets further away from Israel and the Palestinian territories have
been enjoying 20 months of rising oil prices and the prospect of fiscal
surpluses.

It is not surprising, therefore, that there are some bright spots - among them,
Saudi Arabia, where the all-share index is up 12 per cent on the year following
a 42 per cent gain in 1999.

"We don't have dotcoms - it's all bricks and mortar, so I guess we've been doing
OK," says Abdullailah Mukred, of Saudi American Bank in Riyadh.

"There's a very strong correlation between the price of oil and the economy
generally, and the stock market definitely reflects that. There's going to be a
budget surplus this year for the first time in 16 or 17 years. Volume is up and
earnings are up. The market went up last year, yet the market multiple is
cheaper than it was a year and a half ago," he adds.

Elsewhere in the Gulf, things are not so rosy. Oman, which is open to foreign
investors, received a fillip after the government pumped in OR50m (Dollars
129.8m) this month.

But the reason for the injection was scarcely encouraging. Following a bubble in
the Muscat Securities Market in 1997 and a resulting correction, a number of
smaller brokers and investors were in trouble. The market is still down more
than 16 per cent this year.

More mysteriously, Kuwait, a large oil exporter, has been stagnant. The Kuwaiti
Stock Exchange is not open to foreigners but, in spite of firm oil prices and
the payment of Gulf war reparations through the United Nations, the market index
has risen just 1.5 per cent on the year.

While that masks great polarity between the blue-chips in Kuwait and the
less-well-regarded stocks, the main problem is that Kuwaiti domestic investors
have been more interested in New York and the Nasdaq exchange.

"The Kuwaitis are great momentum investors," says one analyst.

Nonetheless, the depression in Kuwait and Oman is surprising.

"The correlation appears to have broken," says James Graham-Maw of Blakeney, the
emerging market specialists, of the link between oil and local stock market
performance.

"The lag effect that has been enjoyed by these markets has got even longer. I
think governments - Saudi Arabia perhaps being the exception - have shown
themselves very unwilling to spend this windfall of higher oil prices," he says.

Outside the Gulf but still far away from Israel and the West Bank is the small
Tunisian market, capitalised at roughly Dollars 3bn.

Although Tunisia is not a hydrocarbon exporter, the economy has been growing at
6 per cent a year amid a cautious economic reform programme.

Yet, even here, the bank-dominated stock market has only risen by 19 per cent
this year.

Brokers attribute the relatively meagre returns to another contagion - not that
of proximity to Israel and the Palestinian territories, but to being sandwiched
being Libya and Algeria.

Meanwhile, Morocco, an economy that is more directly affected by the performance
of Europe than the rest of the Middle East, has been languishing.

The Casablanca bourse was down by 13 per cent last week compared with the
beginning of the year. The market is also expensive by regional standards,
trading on roughly 13 times expected earnings in 2000.

According to Framlington Asset Management, which runs the Maghreb Fund investing
in Morocco and Tunisia, the largely agricultural Moroccan economy - and by
extension the Casablanca bourse - have been hit by a series of droughts.

The consensus is that once the rains return, the market will pick up. Investors
are also hopeful that King Muhammed will institute further reform.

Then there is Egypt, of which great things were hoped in the mid-1990s. This
year investors were deterred by an overvalued Egyptian pound.

The currency has been allowed to depreciate by 15 per cent since the summer, but
the manner in which it has been done - without any policy announcement - has
continued to deter investors.

"They've suffered death by a thousand cuts. Uncertainty is what markets don't
like, and (the Egyptian authorities) have done it in the most uncertain way
possible," says Jonathan Asante of Framlington.

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                  December 2, 2000, Saturday London Edition 1

OFF CENTRE: Will the Russian bear roar again?: Charles Clover traces the growing
influence of the right theories of Alexander Dugin

BYLINE: By CHARLES CLOVER

SECTION: OFF CENTRE; Pg. 10

LENGTH: 1440 words


It's the little things that betray Alexander Dugin as a formidable mastermind of
global empire. Maybe it's the pointy beard. Maybe it's the habit of trilling his
r's a little too heavily. Maybe it's that mellifluous "very clever, Mr Bond"
tone in his voice.

Maybe it's the maps he has lying around his Moscow office, showing the Eurasian
land-mass cluttered with an assortment of arrows, wedges, cross-hatching,
clamps, pincers and circles.

And maybe it's because he can't resist divulging his master plan: "In principle,
Eurasia and our space, the heartland, remain the staging area of a new
anti-bourgeois, anti-American revolution."

Only a few years ago, Dugin was considered a crackpot. He still is. But today he
is a "very well-read and prolific crackpot with a lot of influence", according
to Dmitri Trenin, defence analyst at the Carnegie Moscow Centre, the mainstream
think-tank.

Indeed, after a decade of cross-pollination between rightwing intellectuals and
Russia's military and political elite, Dugin's pet philo-sophy, an obscure
theory called geopolitics, has advanced to the outskirts of mainstream thought
in defence and foreign policy circles in Russia.

Geopolitics prophesies an eternal world conflict between land and sea, and
hence, Dugin believes, the US and Russia.

His 1997 book, The Basics of Geopolitics, advocated a rebirth of the Soviet
Union ("or the Russian Empire, or third Rome, or whatever you want to call it,"
he says), and cementing a continental bloc of anti-American Eurasian states that
would oust US influence from the Eurasian land-mass.

According to his book: "The new Eurasian empire will be constructed on the
fundamental principle of the common enemy: the rejection of Atlanticism,
strategic control of the USA, and the refusal to allow liberal values to
dominate us. This common civilisational impulse will be the basis of a political
and strategic union."

And lately, Dugin has a spring in his step as events seem to back up his ideas.

Russia's president Vladimir Putin, for example, has a travel itinerary that
looks like some of the maps in Dugin's book.

One trip was to visit Moscow's one-time cold war ally India, where he endorsed
India's nuclear programme. India has been subject to US sanctions after it
tested five nuclear weapons in 1998.

Putin recently said Russia was ready for "a new phase" in relations with another
former cold war ally, Syria. Russia and China have lately been trying to outdo
each other in calling for a Sino-Soviet partnership with echoes of the old cold
war bloc.

Over the summer, Putin pursued overtures with North Korea, Libya and Iraq, a
sort of who's who of international pariahs.

Maybe "empire" is too strong a word, Dugin admits, but nevertheless, he says:
"Already, our recommendations are being implemented at very high levels. I think
as time goes by you will see that more and more of our analysis is being used."

While the Kremlin insists its decisions are based on "pragmatism" rather than
obscure geopolitical theories, it concedes that its foreign policy has undergone
a momentous shift: a newly published set of foreign policy guidelines put out by
the Russian ministry of foreign affairs decries a "strengthening tendency
towards the formation of a unipolar world under financial and military
domination by the United States", and calls for a "multipolar world order". It
describes Russia's most important strength as its "geopolitical position as the
largest Eurasian state".

Dugin is quick to take part of the credit for these new guidelines, and at first
glance it might seem presumptuous. But when one examines the man and his
associates, the objections fade.

Take General-Lieutenant Nikolai Klokotov (ret), who held the chair of strategy
at Russia's Military Academy of the General Staff from 1988 to 1996. He is
listed as a consultant for The Basics of Geopolitics.

Dugin has also been appointed a key adviser to Gennady Seleznyov, speaker of the
state Duma, Russia's lower house of parliament.

And while geopolitical theory was banned during Soviet times for its links to
Nazism, Russia's communist party has practically adopted the ideas for its own.
Gennady Zyuganov, communist party chairman, has published a primer on
geopolitics called Geography of Victory.

Russia's main military diplomat, General Leonid Ivashov, the head of the
international department at Russia's Ministry of Defence, and the mastermind of
Russia's takeover of the Pristina airport in Kosovo last year, is one of the
converts.

"The science of geopolitics has flourished in the post-communist period, and
this is a natural, healthy, objective response to circumstances," he says.

Ivashov's book on the subject, Russia and the World in the new Millennium,
borrows heavily from Dugin's work. He writes: "The experience of geopolitical
confrontation between Russia and the west is not limited to the seven decades of
the Soviet Union, but has a centuries-long tradition.

"Russia cannot exist outside of its essence as an empire, by its geographical
situation, historical path and fate of the state."

Says Ivashov: "The first democratic government of Russia looked at the US as
something like a donor, or as a strategic partner. This is a huge misconception.
Look at the actions behind the facade of public statements. Read (Henry)
Kissinger, read (Zbigniew) Brzezinski, you come to the conclusion that, yes in
some ways we are partners, but really we are geopolitical rivals."

Dugin, by his own account, became interested in geopolitical theories in the
1980s, after graduating from the Moscow Aviation Institute. At the time,
geopolitical works were banned in the Soviet Union because of the theory's links
to Nazism, so Dugin was considered a dissident. He read voraciously and taught
himself several languages.

In 1991, he joined the staff of the extremist newspaper Dyen, published by
Aleksander Prokhanov, known at the time as the "nightingale of the general
staff" for his close ties with Russia's top generals.

Soon after the failed military putsch in August 1991, Dugin left Dyen and
created his own magazine, Elementy, devoted to the philosophy of Europe's new
right. On its editorial board, were Alain de Benoist and Robert Steukers, both
noted new right intellectuals.

In 1992, a Moscow summit organised by Dugin and held at the headquarters of
Russia's military general staff brought together Russia's generals and
representatives of the new right movement, including de Benoist and Steukers.

The subject of discussion was the formation of an anti-US "continental bloc" of
Russia, Germany and France.

Dugin was "obviously very close to the military men", said de Benoist,
interviewed recently about the conference. He said he declined further
invitations after that conference, conceding, "we were very far apart
conceptually".

But the idea of a continental bloc - a Russian strategic alliance with European
and Asian states - has since then attracted a number of Russian intellectuals,
strategists and politicians.

Starting in the mid-1990s, Boris Yeltsin, Russia's then president, began
promoting the idea of a Moscow-Berlin-Paris "axis".

And senior Moscow foreign policy figures, beginning with former prime minister
Yevgeny Primakov, have devoted themselves to the celebration of Count Aleksander
Gorchakov, Russia's legendary 19th century foreign minister who, following
Russia's disastrous defeat in the Crimean war, brought Russia back to greatness
through an alliance with a newly united Germany.

The parallel with today has not been lost, as Putin travelled to Berlin in June
and described such a united Germany as "Russia's leading partner in Europe and
the world".

The overtures to Germany and more recently France echo the desire of many in the
Russian establishment to use a Franco-German-Russian partnership to drive a
wedge between the US and Europe, a project Germany and France show little desire
to assist - so far.

But that doesn't stop Dugin speculating about a "Eurasian axis" of Russia,
Germany, Iran and Japan.

"Of course, this will take some time," he concedes, and proposes to start first
with a much more manageable Eurasian axis of Russia, India and China (according
to his book it is well nigh impossible to have China and Japan in the same
Eurasian axis - you have to choose one or the other).

But, he says: "I am convinced that with Putin as president, the processes of
consolidating our geopolitical space is accelerating, and it is already seen in
Europe and Asia. Everything depends on whether it works. That is the 21st
century gamble."

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                  November 30, 2000, Thursday London Edition 1

NATIONAL NEWS: Judges reject Libyan's plea NEWS DIGEST

BYLINE: By JOHN MASON

SECTION: NATIONAL NEWS; Pg. 2

LENGTH: 255 words


Judges reject Libyan's plea

One of two Libyans accused of causing the Lockerbie bombing in which 270 people
were killed has failed in his attempt to have the case against him dropped.

The judges at the Scottish court in the Netherlands yesterday rejected arguments
by lawyers for Lamen Khalifa Fhimah that there was insufficient evidence for his
prosecution to continue.

Mr Fhimah is accused, with Abdel Basset Ali Mohammed al-Megahi, of the murders
of 259 passengers and crew of Pan Am flight 103 and 11 Lockerbie residents on
December 21 1988.

Mr Fhimah's lawyer, Richard Keen QC, had argued there was no evidence to link
him with key allegations that he had been involved in smuggling a bomb on board
an aircraft at Malta's Luqa airport.

If there had been a conspiracy, then he had been used as a "tool", he said.

However, presiding judge Lord Sutherland said: "We have come to the view that
having regard, in particular, to certain entries in the second accused's diary,
his association with the first accused with whom he is charged with acting in
concert, and, crucially, the evidence of Majid Giaka, we are unable to be
satisfied that there is no case to answer."

Majid Giaka, a former Libyan agent who defected to the CIA, has told the court
that Fhimah had shown him a stash of explosives in his desk drawer at Libyan
Arab Airlines' Malta office before the bombing.

He also said he saw Fhimah handle a brown suitcase of the type forensic experts
believe was used to contain the bomb. John Mason

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           November 29, 2000, Wednesday Surveys GHA1 20001129S202.114

SURVEY - GHANA: Charismatic leader bows out after 20 years

BYLINE: By ANTONY GOLDMAN

SECTION: SURVEY - GHANA; Pg. 2

LENGTH: 1000 words


From army radical to elected president, once friend to Libya but more recently
host to the likes of President Clinton and Queen Elizabeth, a man who lambasted
ministers for driving Peugeots before developing a taste for distinctly unmodest
Jaguar sports cars, Flight-Lieutenant Jerry John Rawlings, 53, the aggressive
nationalist with a Scottish father, who has dominated Ghanaian politics for a
generation, is an enigma.

If Rawlings stands down as scheduled early next year, he will be unique in
Africa for twice handing over to an elected successor. Just 32 when he first
seized power, his first stint in office was notable both for its violence -
three former military rulers were executed on the beach - and, at three months,
its brevity.

His second, since the end of 1981, represents Ghana's longest period of
sustained political stability and economic growth since independence.

The Rawlings legacy, however, is likely to prove mixed and controversial. "He
has been our most authoritarian leader, yet he is the one who leaves us with our
most liberal constitution," says Yao Graham, a former associate and political
commentator. "He has flitted from the left to the right. Sometimes hypocritical
and violent, he looks set to leave according to the rules, even though he has no
clear idea of what he will do next."

Early flirtations with radical socialism have given way to an enduring
relationship with the World Bank. Military rule and peoples committees have been
replaced by a conventional form of liberal democracy. Diatribes against
corruption now sit uneasily with evidence of widespread but unpunished
corruption and cronyism in high-profile state institutions, such as the Social
Security and National Insurance Trust.

Although he demanded "nothing less than a revolution, something that will
transform the social and economic order of this country" in his inaugural
broadcast," Rawlings' supporters nevertheless prefer to argue the sharp change
in political and economic direction that has subsequently followed was
enlightened pragmatism.

Moreover, in hitherto neglected rural areas, he is celebrated for a development
process that has brought roads, power and water. Levels of absolute poverty have
fallen, while health and education indicators have improved. Support is strong
among farmers who remember the days of price controls, punitive taxation and
mass smuggling in the 1970s.

Even in the cities, where the current economic crisis has hit most hard, his
charismatic leadership has an enduring appeal. When city officials in Accra
began a clean-up operation in advance of President Bill Clinton's visit in 1998,
he ordered them to remove fencing around open drains, insisting that the US
president must see Ghana as it was.

In his early days, he would carry half-smoked cigarettes behind his ear in a
public show of thrift and poverty. He remains today a dynamic speaker. At the
end of a visit to Scotland earlier this year, where he was so hounded by the
media over reports of alleged human rights abuses that only a handful of members
of the Scottish Parliament attended his speech, he abandoned his official text
to launch a tirade against the evils of tabloid journalism. On the campaign
trail, his subordinates and rivals appear dull and remote by comparison.

It is that unpredictable, sometimes violent energy that contemporaries believe
has helped preserve the image of political stability over the past two decades.
"We were always afraid of what he might do next," says a former government
minister, "but we were always pretty sure that whatever it was, he would carry
the military with him."

Indeed, Rawlings has proved so powerful a personality that there are some doubts
over the capacity and resilience of institutions to adapt to his departure. The
president has consistently argued that the constitution should be revised, for
example complaining earlier this month that it had taken an unreasonable amount
of time to clear his wife's name following allegations of cocaine smuggling.

"We have come a long way," the president told supporters recently. "I am tired.
I am grey. But at least I know one thing. I have fought for the truth. I have
fought for your truth. Don't disappoint me, don't disappoint yourselves, by
introducing deceit and lies back into the politics of this nation."

If it sounded like a threat, the effect, in a period of deteriorating economic
conditions and an untested leadership, may not have been altogether
unintentional. Although more well-rounded than in his earlier days and beset by
unspecified health problems, Rawlings after 20 years in power is still younger
than most world leaders and will remain the life chairman of the ruling National
Democratic Congress, reportedly with powers to attend cabinet meetings, should
the party win in December.

Quiet retirement seems an unlikely option. His controversial style, though,
makes the prospect of slipping into the role of elder statesman somewhat
unlikely, especially with his enemies hinting that they may use his departure
from office to initiate legal challenges over alleged abuses. Any display of
conspicuous consumption - the president enjoys flying and fast cars - is likely
to generate a hostile response from an increasingly lively press, especially
given his earlier condemnation of the extravagance of his predecessors.

The persecution he faced after he first left office is widely held up to have
been as much the cause of the 1981 coup as Rawlings' stated desire to build a
new order that "must be anti-imperialist, anti-colonialist and must aim at
instituting a popular democracy".

If such concerns were again to tempt the president back to the political centre
stage, by common consent the task would be far harder now than 20 years ago. His
supporters believe such confidence reflects a consolidation of democracy and
self-belief in civil society that they hold up as the greatest legacy of the
Rawlings era.

Antony Goldman

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                    November 28, 2000, Tuesday USA Edition 1

OBSERVER: Gadaffi's way AVENUE OF THE AMERICAS

SECTION: OBSERVER; Pg. 15

LENGTH: 147 words


Gadaffi's way

Some people (mainly Jimmy Carter) have called for elder statesmen Gerald Ford
and Jimmy Carter to step in and end the legal wrangling over which candidate
really won the Florida vote.

But another person has come up with a solution for the whole ugly impasse, and
since he was in office before either of the ex-presidents above, perhaps his
idea warrants a little respect.

Muammer Gadaffi, who has been in charge of Libya for the last 30 years, reckons
that in order to avoid a "civil war in America", George W. Bush and Al Gore
should job-share the presidency.

In any case, Gadaffi argues: "there is no difference between Bush and Gore". But
not everyone may be of the opinion that the two candidates might co-exist in
perfect harmony in the Oval Office.

And as for Muammer himself, when was the last time he offered to share his job
with anyone else?

LOAD-DATE: November 28, 2000

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                  November 23, 2000, Thursday London Edition 1

MIDDLE EAST: Egyptian diplomacy leaves a bitter taste

BYLINE: By JAMES DRUMMOND

SECTION: MIDDLE EAST; Pg. 11

LENGTH: 498 words

DATELINE: CAIRO


There was no mistaking the disillusion in Egypt as William Cohen, the USdefence
secretary, left Cairo for Israel yesterday. He had urged Egypt, one of the most
consistent proponents of the peace process over the past 20 years, to reconsider
the withdrawal of its ambassador from Tel Aviv.

"There is always a moment where a decision has to be taken. We all feel angry -
officials as well as people," said Amr Mousa, the foreign minister, after
announcing the measures on Tuesday in protest at Israel's use of force in the
West Bank and Gaza Strip. "We haven't seen any result from the communications
which we have undertaken. When they (the Israelis) have something meaningful to
say we are ready to listen."

The so-called al-Aqsa intifada puts the Egyptian leadership in an awkward
position. Having backed negotiation as the way to resolve the conflict, the
violence leaves the regime open to domestic and Arab criticism of spinelessness
and even, in more heated moments, of collusion. Cairo has argued, however, for
moderation and for a considered escalation of diplomatic measures as long as the
violence continues.

This consistent advocacy of diplomacy comes at a price. Anwar Sadat, then
president, was assassinated in 1981 by Muslim extremists because he signed the
Camp David treaty. Egypt was ostracised by its Arab neighbours for more than a
decade because of its recognition of Israel.

More recently Hosni Mubarak, the current president, organised an emergency
meeting in Sharm el-Sheikh in October in an effort to broker a ceasefire between
the Israeli army and Palestinian protesters. At a subsequent summit of Arab
states in Cairo he resisted pressures to break diplomatic relations on the
grounds of keeping lines of communication open.

Iraq, Yemen and Libya and some Palestinians castigated the summit resolution as
weak and ineffectual.

Now the Egyptians have had enough and the first step in a diplomatic war has
been taken. The next measures could include the expulsion of the Israeli
ambassador from Cairo, followed by a complete rupture in diplomatic relations.

Cairo's relationship with Israel has been far from easy from the moment
diplomatic links were opened after the 1979 Camp David treaty.

While Israelis have visited Egypt, and in particular the resorts of the Sinai
peninsula, in growing numbers since 1980, the relationship has not been
reciprocated.

Trade has largely been limited to the sale of Egyptian gas. Several Israeli
textile and cotton experts work in Egypt but it has always been difficult for
Egyptians to obtain access to Israel.

Yesterday's al-Ahram newspaper, which reflects official thinking, said: "Egypt
is not a neutral player or intermediary in the peace process between the Arabs
and Israel, it is essentially an Arab player. When Egypt recalls its ambassador
to Israel it is sending a message to the world, and especially Israel, that the
aggressor must pay the price of his actions." Editorial Comment, Page 24

LOAD-DATE: November 22, 2000

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                     November 20, 2000, Monday Surveys BAH1

SURVEY - BAHRAIN: Alba keeps the flag flying

BYLINE: By ROBIN ALLEN

SECTION: SURVEY - BAHRAIN; Pg. 4

LENGTH: 590 words



It seems fitting that Aluminium Bahrain (Alba), the country's second oldest
industry which started production in Bahrain's independence year from Britain in
1971, should start the millennium with two expansion schemes. This should enable
it to regain the lead as the larger of the two Gulf smelters - the other is
Dubai Aluminium -and to keep its position as the largest single employer of
Bahraini nationals.

At the beginning of October, the US's IFC Kaiser completed its feasibility study
on Alba's proposed Dollars lbn expansion plan, to raise production capacity by
50 per cent to 750,000 tonnes a year of primary aluminium. The expansion, part
of a dual programme costing Dollars 1 .4bn, would involve adding a fifth potline
to Alba's production capacity.

It would also enable Alba to add 250MW power output to the existing 1,500MW,
while still providing 275MW to the government during peak summer periods. After
Alba's expansion is completed in 2004, the two

Gulf smelters will have a combined capacity of i .25m tonnes a year (tpa). From
early next year, Alba also expects to be producing 450,000 tpa of calcined
petroleum coke, more than enough to substitute the 250,000 tpa of green coke it
has up to now imported from the US and Argentina. The surplus will be exported.
In addition, it will benefit from a new 40,000 cubic metre a day (cmd)
desalination plant.

"Most smelters," says Abdul Karim Salimi, Alba's chief executive, with evident
satisfaction, "buy their power. But those like us, who produce their own
on-site, have a choice of additional power or water. We have both." These
expansions are milestones in the life of 59-year old Mr Salimi. He has already
notched up a few firsts during his 45-year career. In 1955, he was the first
Bahraini to be appointed to a managerial position under the British-directed
Bahrain Petroleum company (Bapco)'s training scheme.

After six years, Bapco selected him above his peers for higher studies in
England, and again promoted him after his retum. Then, in 1969, the year that
Muammer Gadaffi seized power from the Libyan monarchy, he became a manager of
Esso Standard in Libya.

Mr Salimi was catapulted to become general manager of BP's Libyan operations.
His Libyan career lasted five years. He joined Alba in 1974, and moved up the
corporate ladder to become chief executive in 1997.

Alba is not without its sceptics in the private sector. First, they point out,
Bahraini nationals cost more than expatriates, and only a nationalised ir dustry
headed by a minister would make Bahrainisation a matter of pride at the expense
of profitability.

Second, they say, one look at Alba's ownership structure explains why
thefeasibility study has taken twice as long - one year -as originally expected,
and why the expansion is expected to take three to four years to complete.

Private sector participation in Alba is confined to the 3 per cent owned by
Breton Investments, a subsidiary of the German group, Eckart. The Bahraini
government owns 77 per cent, with the balance held by Saudi Arabia's Public
Investment Fund, and the principal Saudi board member, Hashim Yamani, the
industry and electricity minister.

Shareholder approval for Alba's expansion had been expected at a meeting of the
board on November 8. But this was not forthcoming. However, on November 12, the
cabinet approved the expansion "in principle" and instructed the industry
ministry to put financial and debt structyring in place. But no financial
adviser has yet been appointed.


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                 November 15, 2000, Wednesday London Edition 1

INTERNATIONAL ECONOMY: Mediterranean voyage becalmed by age-old distrust:
Euro-Med partners are failing to make headway because of the Middle East crisis
and the reluctance to enter bilateral accords, says Roula Khalaf:

BYLINE: By ROULA KHALAF

SECTION: INTERNATIONAL ECONOMY; Pg. 18

LENGTH: 795 words


Five years after the European Union launched an ambitious plan to promote a
peaceful and prosperous Mediterranean zone, EU foreign ministers meet their 12
Mediterranean counterparts today in Marseilles to explore ways of
re-invigorating a faltering process.

Despite the merits of the vision articulated in the November 1995 Barcelona
conference that started the Euro-Med partnership, the process has been severely
undermined by crisis in the Middle East as well as the slow implementation of
plans for regional economic integration.

"People talk more to each other now but in terms of concrete progress on
Barcelona there's little to report," said a western official. "It can only go as
far as the slowest ship and that is the Middle East peace process."

True, the Euro-Med partnership is the only multilateral forum today where Arabs
and Israelis sit around the same table, even if to exchange accusations.

But with Palestinians and Israelis now locked in the worst violence in a decade,
Syria and Lebanon - two Euro-Med participants that take the toughest line
against Israel - have threatened to boycott today's meetings. Libya, which
attends as an observer, announced that it would not participate.

Importantly, plans to sign a charter for peace and security, which was to be the
highlight of the summit, have been scrapped as no Arab country will enter into a
security partnership with Israel at this time.

The Barcelona process has been marred by problems that go beyond the peace
process. The partnership is underpinned by bilateral association accords to
create a free-trade Mediterranean zone in 2010. A Euros 4.4bn (Pounds 2.8bn)
financial package of assistance to support economic transition was agreed in
1995 for five years and another will be unveiled in Marseilles.

But concluding agreements has proved a challenge. Cyprus, Malta and Turkey are
accession candidates for the EU. Since 1995 Tunisia, Morocco, Jordan, Israel and
the Palestinian Authority have signed association agreements.

Negotiations with Egypt were completed several months ago but Cairo has yet to
put its signature on the deal. Lebanon, Syria and Algeria are still in various
stages of negotiations.

Some Mediterranean countries have welcomed the economic discipline imposed by
the accords, but others lament their apparent economic bias in favour of the EU.
While the free-trade zone will open Mediterranean markets to EU industrial
products, agriculture - the main export of some of the developing countries
involved - will be excluded from free access into the EU.

Recognising this frustration, Chris Patten, the EU commissioner for external
relations, has indicated that part of the attempts to improve the Euro-Med
partnership must include "an increased sense of shared solidarity" on
agriculture.

Hopes that agreements would lead to a flood of foreign investment have failed to
materialise. The EU's poorer partners are receiving a mere 2 per cent of
European foreign direct investment (FDI) and only 1 per cent of worldwide FDI.

Disbursement of financial assistance committed by the

EU also has been dismal. The European Commission says a mere 26 per cent of
total commitments have been paid. It has promised improvement in payment
mechanisms.

EU officials argue that failure to attract foreign investment indicates the need
for more rapid economic transformation in the developing countries of the
southern Mediterranean, including labour and judicial reform.

They also stress that a key requirement to attract foreign capital and build a
successful Mediterranean free-trade zone is boosting intra-regional trade. It
now accounts for a mere 5 per cent of the 12 EU partners' total trade flows.

"Only an increased horizontal exchange of goods, capital and human resources
will create markets large enough to attract significant foreign direct
investment, which in turn are indispensable for sustainable economic growth,"
said the Commission.

"So far, structural change in the 12 Mediterranean partners remains
unsatisfactory, thus stifling the multilateral exchange of goods, financial
assets and services."

On the political front, too, the Barcelona process has had serious shortcomings.
Human rights organisations have criticised the EU's failure to use the financial
leverage inherent in association accords to press for an enforcement of the
clause committing Mediterranean partners to respect human rights.

"Five years after the start of the Barcelona process it is high time to move on
from solemn, but as yet empty, declarations to a serious and tangible
partnership for the protection of human dignity and fundamental rights on all
shores of the Mediterranean," says Amnesty International, the London-based human
rights group.

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                    November 14, 2000, Tuesday Surveys SWI1

SURVEY - SWITZERLAND: And the money keeps rolling in SWISS FIDUCIARY DEPOSITS by
Norman Peagam: After a slide in the early 1990s, the volume of these funds
topped SFr500bn this year, 60 per cent denominated in dollars

BYLINE: By NORMAN PEAGRAM

SECTION: SURVEY - SWITZERLAND; Pg. 3

LENGTH: 818 words


Someone has been making an awful lot of money in Kazakhstan recently. Swiss bank
deposits from the central Asian republic have ballooned from less than Dollars
1m in 1992 to Dollars 125m in 1998 and Dollars 530m at the end of last year.

That is equivalent to more than a quarter of the entire money supply of the
former Soviet republic, where the average monthly wage is about Dollars 150. The
rapid growth of Swiss bank accounts belonging to wealthy Kazakhs is reported in
a forthcoming study by Swissmoney Research*.

Using publicly available data, the report tracks the flow of funds from more
than 180 countries and territories to Switzerland between 1990 and 1999,
examines where the money is reinvested and shows which banks are most active in
gathering these funds.

The study focuses on so-called fiduciary transactions, which mainly consist of
large, short-term cash deposits placed with Swiss banks by foreigners. Unlike
conventional deposits, they are then transferred to banks outside Switzerland in
order to avoid the 35 per cent Swiss withholding tax on interest. Moreover, they
are placed abroad in the name of the Swiss bank, enabling clients to maintain
anonymity. Swiss banks charge a small fee for providing this service.

Fiduciary transactions represent only a fraction of the total wealth managed by
Swiss banks. There are currently about SFr530bn (Dollars 290bn) of such
transactions outstanding, compared with SFr3,500bn of client securities in
custody at the end of last year. In addition, the ultimate origin of much of
this cash remains unknown because up to a third of it comes from offshore tax
havens, providing an additional layer of secrecy.

Nevertheless, although fragmentary and incomplete, the available data does shed
light on the global nature of the business.

The volume of fiduciary deposits grew steadily during the 1980s, reaching
SFr300bn in 1990, according to statistics compiled by the Swiss National Bank.
It then fell by more than 20 per cent in the early 1990s, a time of economic
recession in the industrialised world, before resuming its upward climb in 1996
and surpassing SFr500bn for the first time earlier this year.

About 60 per cent of the total is denominated in US dollars, 22 per cent in
euros and 7 per cent in Swiss francs. By region, about 30 per cent of the
deposits come from western Europe (excluding Switzerland), 23 per cent from the
Caribbean and 15 per cent from the Middle East, followed by Latin America (8 per
cent), Asia (6 per cent), Africa (4 per cent) and North America (3 per cent).

The countries of eastern Europe and the former Soviet Union are also
fast-growing sources of funds. Italy was the largest single market during most
of the 1990s, with SFr17.5bn of deposits at the end of last year. But it was
overtaken in 1998 by the British West Indies (which probably refers mainly to
the British Virgin Islands), through which the volume of deposits has rocketed
from SFr1bn in 1990 to SFr30bn last December. Almost every country in the world
is represented, including several considered outlaw states by the US government
such as Iran (with SFr813m on deposit at the end of last year), Iraq (SFr95m),
Libya (SFr536m), Yugoslavia (SFr180m), North Korea (SFr17m) and Cuba (SFr7m)

Clients in these countries may regard anonymous deposits placed via neutral
Switzerland as the best way to invest their liquid foreign exchange and avoid
potential US seizure or sanction. Although relatively small, the flow of cash
from some of the world's least affluent countries is striking. Last year, for
instance, the largest percentage growth came from places such as Vietnam,
Eritrea, Albania, Sierra Leone, Benin and Zambia.

Meanwhile, deposits from larger developing countries continue to expand, notably
from Nigeria (up 17 per cent last year to SFr675m), the Philippines (up 36 per
cent to SFr543m), Kenya (up 65 per cent to SFr771m) and Indonesia (up 95 per
cent to SFr952m).

To avoid Swiss withholding tax, fiduciary deposits are transferred abroad and
almost 90 per cent of the funds are placed with banks in just five European
countries: the UK, including Jersey, Guernsey and the Isle of Man (27 per cent),
Luxembourg (18 per cent), Belgium (15 per cent), the Netherlands (15 per cent)
and France (11 per cent).

If British overseas territories are included, the UK share rises to 30 per cent.
UBS is by far the largest player in this low-margin, high-volume business, with
SFr62bn outstanding at the end of last year, followed by Credit Suisse, with
SFr37bn and Citibank, with SFr12bn.

The field is dominated by leading international banks with global branch
networks and banks with strong regional ties, especially to the Middle East.

* Cash in Transit: Fiduciary Deposits in Switzerland 1990-1999. December 2000.
Pounds 125/Dollars 175. Swissmoney Research, PO Box 508, Crawley, RH10 2XW,
England

LOAD-DATE: November 13, 2000

LANGUAGE: ENGLISH

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                        Financial Times (London,England)

                     November 13, 2000, Monday Surveys SEN1

SURVEY - SENEGAL: All change for a fresh style of government: INTERVIEW:
PRESIDENT ABDOULAYE WADE by Nim Caswell: The new president, elected president in
March, discusses his plans for fostering changes in the economy, the
constitution and, most importantly, in public attitudes

BYLINE: By NIM CASWELL and ABDOULAYE WADE

SECTION: SURVEY - SENEGAL; Pg. 4

LENGTH: 1527 words


Q: You've been in office for seven months, having campaigned for 26 years on the
theme of change; so what changes have you made, and are you happy with progress
so far? A: Iam very happy with these first seven months at the helm.

The most important change to have taken place is in people's minds. They're
ready to make an effort, not because the president says so or because they're
paid to do it, but because they know they must. Won't they simply fall back into
the old habits? Not at all. We are building a way out of the ghetto.

There's been a complete change in the style of relations between the individual
and the state. The president no longer travels with a long cortege. There's a
completely new style of presidency.

At an institutional level, there are big changes under way, too. A new
constitution will be put to a referendum in January. The new National Assembly
will be elected before April 1, when the old Assembly's mandate expires. What
can you say about the new constitution? I don't know a country in the world that
has taken such care over the drafting of a constitution. A commission of legal
and constitutional specialists and judges drew up a first draft, amended by the
prime minister and the full cabinet. Then, all the registered political parties
got a chance to comment. The process was exceptionally democratic. And the
content. ...? At the moment, we have a presidential regime; the prime minister
does not feature. So I'm going to institutionalise the role of prime minister,
with clearly defined areas of responsibility. The president in future won't be
able to dissolve the assembly on the first vote of no confidence - only if it
happens twice.

The Senate will be abolished. It's a shame, because I was the first to propose
that Senegal should have an upper house in 1974. But in practice it is useless.
It simply goes over the same ground as the National Assembly, and is packed with
Socialist Party candidates who failed to get themselves elected as MPs. The
Economic and Social Council is going, too. What other changes are envisaged?
We're going to make the judiciary more independent. That's the main thing. But
we also envisage a clause that will bring forward elections at every level,
including not only the National Assembly but regional, town and rural councils.
With effect from the next elections, we will have five years of peace. Five
years to work. Does that mean you anticipate your own party having a majority in
the Assembly by then? Whether of my own party, or if necessary a coalition.
Would it be fair to suggest you find yourself closer, ideologically, to some
wings of the Socialist Party than to your present coalition partners? It would
be difficult to say that. Politics in Senegal is complicated, full of nuances.
Take the parties that describe themselves as being of the left. It's true that
ideologically we're far apart. But in practice, we have always fought together
against the Socialists. I've been in prison with all of their leaders - several
times! Abdoulaye Bathily, Amath Dansoko, Landing Savane. But opposition and
government aren't the same thing...? True, but it is something that unites us...
a certain conception of the state. Also, certain of the old parties have
detached themselves from their Marxist origins. And the Socialist Party itself,
being descended from the single ruling party instituted by Leopold Senghor (the
country's first post-independence president) embraces a huge range of opinion.
There's been a realignment of political thought in Senegal. Turning to the
situation in Casamance, do you expect to meet Abbe Diamacoune Senghor, leader of
the separatist MFDC, soon? I have been in contact with him and the MFDC since
I've been here. But you mustn't mix contact and discussion with negotiation.
Independence for Casamance is not negotiable.

We're in the process of setting up a system of reconciliation. As a first step,
we have arranged help for those displaced by the troubles. Now we're moving into
the second phase, under which the Gambian government will help us to repatriate
all the Casamancais living in their territory. A large part of the solution lies
in relations with neighbouring countries... The president of Guinea-Bissau has
said he would never tolerate attacks on Senegal from his territory. Better
still, he has agreed that the United Nations should send a force. The president
of Gambia has decided to expel the independentistes from his territory. They've
even started. Now we're going to get down to discussions. I think that in a very
short time we will be able to make progress. Then there's Mauritania and the
project known as the vallees fossiles... We've repudiated the name vallees
fossiles. But as far as the Senegal river valley is concerned, we are bringing
our policies up to date, taking into account the entirety of Senegal's water
resources.

During the wet season the surplus water floods villages and even threatens to
sweep away St Louis. So we have another project - nothing to do with the vallees
fossiles -so that in case of flood the water is channelled inside Senegal.

I told the president of Mauritania he was welcome to divert that water into
Mauritania. He was delighted! So we have no problem with Mauritania. So will the
development of the river valley continue as planned? None of the three members
of the Organisation pour la Mise en Valeur du fleuve Senegal, - Senegal,
Mauritania and Mali - has come anywhere near realising the irrigated area
allowed under the treaty. We've only used 16 per cent of our allocation. All we
want to do is to fulfil the potential of the area.

Agriculture is at the heart of my thinking. We can grow lots of things here the
European market needs. Gherkins, for instance. And there's a market for fruits
like strawberries and melons, endive, green beans... So we're talking about
horticulture with a high value ... Exactly. Once we've mastered the production
side, we need to look at exports. The airport at St Louis will be expanded for
freight aircraft to serve these markets. We've had offers from Italy, Morocco
and Spain to help us finance storage facilities. I also want to improve
transport linking St Louis to its surrounding district. You say 'we', but won't
most fall to the private sector? Of course. We will provide the infrastructure,
but everything else is for private companies. We have Senegalese who are asking
for hectares and hectares of land for market gardening. I imagine development of
large industries. We envisage a large factory to produce flour from maize,
manioc, potatoes and wheat, all destined for export. By processing our produce,
we add value.

Political change in Senegal is going to translate into economic change. I am an
economic liberal and I believe in the free market. That's why we're planning to
call on the market for structural investment in areas such as roads, the new
toll motorways, the new airport, a new town near Dakar, and an African business
centre.

For the first time, we're going to do without the World Bank, and build viable
projects using entirely private capital. That's the challenge I've set. Senegal
has been under the tutelage of the World Bank and the IMF for more than 20
years... I'm not saying we can do without them altogether, but I want to make a
start and I think we'll be among the first to do so. That means using the
projects we've talked about, and linking them to the real dynamism of the
sectors that offer the best potential for growth via the infrastructural
developments I've outlined.

I've got another project to develop the ports, in Dakar, Ziguinchor, Kaolack,
Fatick and St Louis. Two private groups want to develop the port at St Louis.
We're going to construct several oil refineries. That's to serve the surrounding
region? To serve the region, but with Libya we want to build giant storage
facilities. Iran wants to develop petro-chemicals in Senegal. We're going to
propose that Nigeria builds a refinery in Senegal, though we haven't spoken to
them yet. Private groups say they're ready to be involved in such projects. Will
the population really be ready to wait? People trust me because they know I'm
working on their behalf. You can see it daily on radio and TV. What are the
findings so far of the audit of state enterprises? ? Huge deficits, figures
bigger than you can possibly imagine. Sotrac, the bus company, lost CFA Fr30bn;
the Post Office, CFA Fr17-18 bn; the port of Dakar... even the national lottery,
Lonase. I don't know if there's anywhere else in the world where the lottery
runs at a loss! CFA Fr4bn in the red! There are more, the national railways . .
. Are these deficits due to misuse of funds? Of course. Will the individuals
concerned be brought to justice? Absolutely. We are a law-abiding state, so we
don't want to accuse people without legal foundation. We suspect lots of things,
but we wanted to carry out our enquiries correctly.

In the old days, the Socialist Party and its election campaigns were financed by
the state companies. They couldn't touch those people. But today, we will get
the proof and put it before a judge.

LOAD-DATE: November 12, 2000

LANGUAGE: ENGLISH

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                             1201 of 2746 DOCUMENTS

                        Financial Times (London,England)

                    November 2, 2000, Thursday USA Edition 1

INTERNATIONAL ECONOMY: Iran's oilfield priority boost for Japan OIL EXPLORATION
AGREEMENT AIMS TO PUT PRESSURE ON US OVER SANCTIONS AND PREVENT EUROPEAN
STRANGLEHOLD:

BYLINE: By GUY DINMORE and BAYAN RAHMAN

SECTION: INTERNATIONAL ECONOMY; Pg. 6

LENGTH: 483 words

DATELINE: TEHRAN and TOKYO


Iran yesterday granted Japan first negotiating rights over part of its Azadegan
oil field, in a move that will put pressure on the US to give up its unilateral
sanctions and prevent a handful of European companies gaining a stranglehold in
Iran in the absence of US and Asian competition.

Japan Petroleum Exploration and Japanese-owned Indonesia Petroleum will
negotiate exclusively with National Iranian Oil Company (NIOC) on developing a
section of the oilfield in Iran's south-western Khuzestan province.

The agreement was announced during a visit to Japan by Mohammad Khatami, Iran's
president, and Bijan Zanganeh, its oil minister. It reflects Japan's desire to
forge stronger ties with Iran ahead of the expiry next year of the US Iran-Libya
Sanctions Act.

It is also a boost for Japan's aim of securing its supply of oil, particularly
after the recent loss of a Saudi Arabian concession.

Iranian analysts said a powerful faction within the state-owned NIOC had argued
that Asian competition was needed, even if Japan was not the perfect partner and
would need to form an international consortium to develop the field. "If the US
lifts its embargo, then the Iranians would immediately start negotiating with
the US majors," said one analyst in Tehran.

Under an executive order imposed by President Bill Clinton in 1995, US oil
companies were barred from doing business with Iran.

The Iran-Libya Sanctions Act allows the president to impose secondary sanctions
on non-US companies investing in Iran's energy sector. So far, however, Mr
Clinton has issued waivers to companies, such as Total and Shell, and analysts
say Japan is no longer concerned about possible US retaliation.

"The act is US law and not international or Japanese law. From a legal point of
view, Japanese companies don't have to follow it," said Takashi Honjo, an
official from the Ministry of International Trade and Industry.

It is unclear what kind of contract Iran will negotiate with Japan, and Tehran
appears open to suggestions.

Iran currently employs the "buy-back" formula, under which companies are paid in
oil equivalent to a pre-agreed value for developing its fields. Iran's
constitution forbids production-sharing agreements.

The short-term buy-backs are not popular with the leading oil companies, as they
provide little long-term incentive. Tehran is currently reviewing its buy-back
system and may offer Japan a longer-term deal, possibly in the form of a joint
venture with Iranian partners that would amount to a form of production-sharing
agreement.

Conoco, the US oil giant, has helped Iran analyse seismic data on Azadegan -
described by one oil executive in Tehran as "the jewel in the crown" - on the
understanding it would be given priority in developing the field, once sanctions
are lifted.

It was now clear, analysts said, that Iran was prepared to wait no longer.

LOAD-DATE: November 1, 2000

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                        Financial Times (London,England)

                  November 1, 2000, Wednesday London Edition 1

FRONT PAGE - COMPANIES & MARKETS: Investors buoyed as Seoul refuses company
rescues

BYLINE: By JOHN BURTON

SECTION: FRONT PAGE - COMPANIES & MARKETS; Pg. 27

LENGTH: 449 words

DATELINE: SEOUL


South Korea yesterday was facing the prospect of a new round of big corporate
bankruptcies as the government appeared determined to shut failing companies.

Hyundai Engineering & Construction, the parent company of the Hyundai group, was
threatened with insolvency, while Dong-ah Construction, which has large
contracts in Libya, was placed in court receivership after banks cut lending.

Meanwhile, Daewoo Motor, the bankrupt carmaker, proposed sacking a fifth of its
workforce, cutting wages and closing overseas units in a bid to persuade
creditors to grant it emergency loans.

The Seoul stock market reacted favourably to signs that the government was
pressing ahead with corporate restructuring, rising nearly 2 per cent to close
at 514.48 points.

Investors have criticised the government for forcing ailing nationalised banks
to prop up companies with little chance of recovery, out of fears of rising
unemployment.

Banks are reviewing nearly 300 weak companies and are expected to select some
for liquidation within the next week. But the markets are worried the government
might intervene to save the biggest troubled companies, including Hyundai and
Dong-ah.

Confidence in the government's corporate reform plans was bolstered when
creditors allowed Hyundai Construction to default on maturing debts. Korea's
biggest construction company narrowly avoided insolvency yesterday when it paid
Won22.4bn (Pounds 13.5m) in debts it failed to honour on Monday and promised to
pay Won26.4bn in debts due yesterday. Trading in Hyundai Construction shares was
temporarily suspended yesterday.

A Korean company is declared bankrupt when it fails to pay maturing debts for
two consecutive days. But Hyundai could soon face a new liquidity crisis as more
debt falls due.

The Hyundai default came as creditors decided to cut lending and refused debt
rescheduling for Dong-ah. The company will apply for court receivership along
with its subsidiary, Korea Express, the nation's largest delivery company, which
guaranteed much of Dong-ah's debt.

Analysts had expected that the government might try to save Dong-ah for foreign
policy reasons since it is the main contractor in Libya's large waterway
project.

Dong-ah was placed under a work-out programme by creditors in September 1998 but
failed to recover due to the depressed domestic construction market.

Another company resisting closure, Ssangyong Cement, Korea's biggest cement
producer, announced plans to sell a 29 per cent stake to Taiheiyo Cement of
Japan for Dollars 360bn and said it was negotiating the sale of a stake in
Ssangyong Information & Communications to foreign investors. Daewoo to cut
staff, Page 35

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                        Financial Times (London,England)

                   November 1, 2000, Wednesday USA Edition 1

SHORTS: Probe holds up Lockerbie trial

SECTION: SHORTS; Pg. 1

LENGTH: 35 words


Probe holds up Lockerbie trial

The Lockerbie trial was adjourned for urgent investigations into new evidence
about the bomb that destroyed Pan-Am flight 103 over Lockerbie, Scotland, in
1988. UK, Page 13

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                   October 31, 2000, Tuesday London Edition 1

INTERNATIONAL ECONOMY: Japan in talks to conclude Iran deal OIL CONCESSION:

BYLINE: By BAYAN RAHMAN

SECTION: INTERNATIONAL ECONOMY; Pg. 14

LENGTH: 357 words

DATELINE: TOKYO


Japan has strong expectat-ions of winning first negotiating rights to develop
Iran's Azadegan oilfield, believed to be one of the world's largest undeveloped
fields.

Japanese government officials confirmed yesterday that negotiations were
reaching their final stage.

The project is likely to be discussed by Yoshiro Mori, Japan's prime minister,
and President Mohammad Khatami of Iran, who begins a four-day visit to Japan
today. Mr Khatami is accompanied on his visit by Bejan Zanganeh, Iran's oil
minister. It is unclear whether a deal will be signed during the visit.

The oilfield, in the south-western province of Khuzestan, is estimated to have
reserves of 26bn barrels and expected to produce up to 400,000 barrels a day,
equivalent to 10 per cent of Iran's current daily output.

Japan is anxious not to be left behind by US and European companies entering the
Iranian market prior to the expiry next year of the US Iran-Libya sanctions law.

But both the Japanese government and companies are treading carefully for fear
of upsetting the US, their chief ally and main trade partner.

Japan must also balance its relationship with Iran with its ties to Saudi
Arabia. In February a Japanese oil refiner, Arabian Oil, lost a four-decade-old
Saudi Arabian concession after Japan refused to fund a Saudi railway project.

Japan has been searching for a new oil concession and the Azadegan field could
fill that gap.

However, Japan has so far been reluctant to agree to Iranian demands that it
finance a railway project, partly for fear of upsetting Saudi Arabia.

International companies will scrutinise the nature of an agreement on the
Azadegan field. Iran currently uses a buy-back system to skirt around a
constitutional ban on product-sharing agreements with foreign companies.

An agreement between Japan and Iran could further rile US companies such as
Conoco, which analysed seismic data from the field and have campaigned against
US sanctions on Iran.

Japanese media said a consortium of trading houses, oil refiners and private and
semi-governmental oil companies would be involved in the Azadegan project.

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                        Financial Times (London,England)

                   October 27, 2000, Friday London Edition 1

COMMENT & ANALYSIS: A good ol' boy's world: If George W Bush becomes US
president, he will cut European commitments. But less than some fear, argues
Lionel Barber:

SECTION: COMMENT & ANALYSIS; Pg. 25

LENGTH: 1009 words


The candidate is an outsider who puts domestic policy first. He smiles a lot and
talks like a good ol' boy. He may know the name of Bulgaria's prime minister;
then again, he may not.

George W Bush, the Republican candidate for US president, is closing in on the
White House. Europe is nervous. The policy elite prefers continuity in the shape
of vice-president Al Gore.

Mr Bush is easily caricatured as a foreign policy neophyte whose twin sins are
timidity and ignorance. He has not inherited his father's familiarity with
foreign affairs. As the governor of Texas, he looks south to Mexico rather than
east to Europe.

Part of the whispering campaign in European foreign ministries against Bush jnr
is intellectual snobbery. Fevered imaginations suggest that a future Bush
administration would retreat behind a missile shield to guard against rogue
states such as Iran, Libya and North Korea and leave the allies to fend for
themselves.

A more sober but no less unsettling view is that a future President Bush plans
to scale back US military involvement overseas, notably in Europe.

Last weekend, Condoleezza Rice, Mr Bush's senior national security adviser,
hardened earlier hints about burden-sharing. She said that Mr Bush, if elected,
planned to tell Nato that the US would no longer take part in peacekeeping in
the Balkans.

"The governor is talking about a new division of labour," Ms Rice told the New
York Times, "the United States is the only power that can handle a showdown in
the Gulf, mount the kind of force that is needed to protect Saudi Arabia and
deter a crisis in the Taiwan straits. And extended peacekeeping detracts from
our readiness from these kinds of global missions."

The reaction in Europe bordered on consternation. Nato diplomats fretted that Ms
Rice had scrapped the cardinal rule of "all for one and one for all" that
underpins Nato's integrated military command. Others pointed out that European
troops account for more than 80 per cent of the 65,000-strong Nato force
deployed in the Balkans.

Ms Rice, a racing certainty to be the national security adviser in a Bush II
administration, probably underestimated how deeply her remarks would resonate
and how easily her nuances would be overlooked.

For example, she conceded that the US would need to consult thoroughly about a
revision of Nato tasks. The next administration was not planning "precipitous"
actions in the Balkans. Nor was there any question of a wholesale withdrawal of
US forces from the continent.

What is missing in the US campaign debate is any sense of the European con
tribution to security on the continent. Or, indeed, the sense that Europe's
aspirations to be a genuine power on the world stage - Tony Blair recently spoke
of superpower - are growing.

Few in Europe, not even the French, question the role of the Nato alliance as
the ultimate guarantor of security on the continent and the counterweight to
Russia. But the EU is committed to assume a bigger role in crisis management
through a separate European Sec-urity and Defence Identity.

Some Americans still see ESDI as a dagger pointed at the heart of Nato but more
sensible professionals recognise that a credible ESDI will lead to a more
equitable transatlantic relationship. The caveat is that French-inspired moves
to create a defence capability independent of Nato must be kept in check.

The big unknown is whether EU governments can muster the political will to
increase defence spending to the level where it can create a credible
60,000-strong rapid reaction force, to be dispatched to conflict zones in which
Nato and US forces decline to be involved.

So far, neither the Americans nor the Europeans have defined the new terms of
engagement for a Europe-only force. It remains subject to numerous imponderables
- not least whether the key European powers, Britain, France and Germany, can
find common ground on the desirability of intervention.

In each of the three Balkan wars of the past decade, the Europeans found it
difficult to reach a common view on military intervention. Paralysis ensued.
This left the door open to a more activist US approach. The Clinton
administration pushed Nato beyond its traditional boundaries into a
peace-keeping mission in the Balkans.

Mr Bush is signalling that he is likely to be more circumspect in his use of US
power. He denounces the Clinton-Gore deployments in Haiti and Somalia as failed
attempts at "nation- building". An adviser says the candidate is much more
sceptical about intervening in "tea-cup" wars that do not immediately threaten
US security.

By contrast, Mr Gore says that US foreign policy should be defined as much by
values as by self-interest. He preaches "forward engagement" to tackle new
security threats such as the spread of Aids and environmental degradation.

This kind of moral language appeals to centre-left governments in Europe.
Remember Mr Blair's expansive foreign policy speech in Chicago last year, during
the Kosovo conflict, in which humanitarianism was seen as the best rationale for
putting soldiers in the firing line.

Such arguments carry little weight in the Bush camp. At a Chatham House seminar,
a former senior Bush administration official ridiculed such rhetoric as social
work dressed up as foreign policy. Ms Rice puts it more succinctly: US soldiers
are not in the Balkans to help schoolchildren cross the road.

So the first few months of a Republican administration would be rocky for
transatlantic relations. But Europeans have no reason to panic. Mr Bush has
plenty of seasoned advisers in his entourage. His hands as commander-in-chief
would also be tied, like his predecessors', by Congress.

Those who worry about a change at the top should also remember another good ol'
boy from the south who said the only thing that counted was the economy, stupid.
His name was Bill Clinton and he made plenty of mistakes in his first few years.
Now the mere mention of his name is enough to turn Europe's leaders misty-eyed.

lionel.barber@ft.com

LOAD-DATE: October 26, 2000

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                  October 21, 2000, Saturday London Edition 1

WORLD NEWS: MIDDLE EAST: Mubarak checks rage with pragmatism: The Egyptian
leader needs to give support to the Palestinian cause without alienating his
western sponsors, says Roula Khalaf

BYLINE: By ROULA KHALAF

SECTION: WORLD NEWS: MIDDLE EAST; Pg. 6

LENGTH: 840 words


Outside Cairo's Al-Azhar mosque, the centre of Islamic learning, worshippers
faced riot police yesterday, deployed in force to prevent unrest as Arab leaders
started streaming into the Egyptian capital for the first Arab summit in four
years.

"With our soul, with our blood, we sacrifice for you, Palestine," they chanted.
In a message to the Arab heads of state, they asked: "Where are the Arab
armies?"

The awakening of Egyptian public opinion, enraged by the Israeli response to the
Palestinian uprising in the West Bank and Gaza, has put enormous pressure on
President Hosni Mubarak, who called the two-day summit. Demands that he break
relations with Israel, more than 20 years after Cairo signed the first
Arab-Israeli peace deal, have been mounting. So far, however, Mr Mubarak - one
of the last of the old-guard Arab leaders on the political stage - has refused
to be driven by popular emotions. With his poor and overpopulated country the
second largest recipient of US aid, he has been playing a balancing act.

His dilemma has been to reconcile popular demands and backing for the
Palestinians with the need to revive the Middle East peace process and not
alienate the west. In an interview on the pan-Arab Orbit television station, Mr
Mubarak dismissed talk of war as unrealistic and started preparing public
opinion for moderate results from the summit.

"We must use reason and sound judgment," he said. "Issuing emotional decisions
is the most dangerous move for a nation, and we are looking for our people's
interests." He also defended Egypt's holding of the Sharm-el-Sheikh summit,
where President Bill Clinton helped to broker a deal that takes the first steps
towards ending the three weeks of bloodshed.

Insisting that the unrest in the West Bank and Gaza had reached a critical stage
requiring immediate action, he rejected accusations that Sharm el-Sheikh was
held to deflate the Arab summit and prevent leaders from taking a stance against
Israel.

The Egyptian president's studied moderation is likely to set the tone of this
week-end's summit. Arab foreign ministers said it would back Yassir Arafat, the
Palestinian leader, and his demands for sovereignty over occupied Arab East
Jerusalem and Muslim holy sites but also support the revival of peace
negotiations. If leaders decide that Arab states should freeze normalisation
with Israel as a means of exercising pressure on the Jewish state, Egypt and
Jordan would be exempt.

Analysts said that a principal aim of Arab leaders, including Mr Mubarak, was to
build on the Sharm el-Sheikh conference and end the Israeli-Palestinian crisis,
which has claimed more than 100 lives.

"The Palestinian uprising is becoming dangerous and getting out of control. If
it continues and protests against Israel and the US continue in the Arab world,
they will turn against the governments," said Salim Nassar, a Middle East
analyst. But Cairo, which has been central in helping Mr Arafat during
negotiations, also wants to use the summit to form a basis for peace
negotiations, out of which Mr Arafat will emerge with a stronger hand and the US
broker with a better understanding of Arab attachment to East Jerusalem.

"We are committed to the peace process but to a correct process, not one in
which there is movement without substance," Amr Moussa, the Egyptian foreign
minister, told the FT. "We need to take a common stance to correct the peace
process and to stand firm against Israeli violations."

That the summit is taking place at all - after four years of failing to get Arab
leaders together - may be considered an achievement in an Arab world that has
been torn by divisions over Iraq since the 1990-1991 Gulf war.

"The summit could create problems, in that the expectations of the people are
beyond what it can deliver. But its effects need not be only negative," said
Mohammad Sid-Ahmad, a leading Egyptian commentator.

"But the very fact that the leaders are meeting and projecting the image that
the issue of Jerusalem concerns all the Arabs is not a bad thing: it sends a
message to the US," he said.

However limited the summit's results may be, the image of the region's leaders
uniting over the Palestinian cause and Jerusalem may also help those Arab
governments that are pro-peace but largely authoritarian placate radical states
such as Iraq and Libya and, perhaps more important, their domestic Islamist
opposition.

"The situation is very difficult and Israelis are not giving people the choice
to be moderate," said an Arab foreign minister. "Israel is giving the upper hand
to the radicals."

With Egypt in the midst of a three-stage parliamentary election, the government
will be loath to see the anti-Israeli demonstrations it has permitted gradually
turn into anti-government protests.

The state's National Democratic party will win most of the seats in parliament,
but the banned Muslim Brotherhood, which is fielding candidates as independents,
complained this week of government harassment of campaign officials.

LOAD-DATE: October 20, 2000

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                             1207 of 2746 DOCUMENTS

                        Financial Times (London,England)

                  October 21, 2000, Saturday London Edition 1

WORLD NEWS: MIDDLE EAST: Gadaffi flies into fray at a confusing tangent

BYLINE: By ROULA KHALAF

SECTION: WORLD NEWS: MIDDLE EAST; Pg. 6

LENGTH: 453 words


Arabs are used to outra-geous behaviour from Libya's Muammer Gadaffi. Yet none
of the region's rulers expected him to go as far as revealing on television the
proposed Egyptian draft of the final declaration of this weekend's Arab summit
in Cairo, called to forge a common stance in support of Palestinians.

But this week, during an interview with the pan-Arab Al Jazeera satellite news
channel, Col Gadaffi waved a copy of the draft and read parts of it, denouncing
the language as a sell-out.

"I challenge the Arab leaders to take steps that would satisfy the angry Arab
masses," he told viewers.

"All the Arab leaders will do in this summit is stop the popular uprising in
Palestine."

The Libyan leader turned his back on the Arab world years ago when governments
refused to follow African states in breaking the now suspended United Nations
air embargo on Tripoli. But Palestinians should not expect much help from the
colonel himself - he is now no longer a backer of rebel movements, though a
French court announced yesterday that he could be prosecuted for alleged
involvement in the blowing-up of a French airliner over Niger in 1989.

He is preoccupied with less violent thoughts these days. As clashes flared
between Palestinian protesters and Israeli troops recently, Col Gadaffi,
accompanied by 1,400 of his officials, was on a rare tour of Arab countries to
present a "strategic proposal" for Arab unity with Africa.

In meetings with officials, trade unions, businessmen, and intellectuals in
Jordan and Syria, he produced a large map, showing a world divided into 10
"spaces", each with its own colour. The only white spot was that of the Arab
states.

The new world, he said, no longer believed in ethnicity or religion. It was
about geography, trade and business. The Arabs were lost, he added, because they
belong to no geographical grouping. "The Arabs must wake up from their long
sleep and be part of the African space," he said.

He went on to make bizarre proposals about occupied Arab East Jerusalem and its
holy sites - the issue at the centre of the Palestinian-Israeli crisis.

"What's all the fuss about East Jerusalem and the mosque? How will we run out of
mosques to pray in? We have 1m mosques," he told the Jordanian parliament. "The
struggle today is about land and mass. Let Israel have East Jerusalem and give
us back all of Palestine."

His Arab hosts were both amused and confused.

"Some parts of what he says make sense but the whole thing is incomprehensible,"
said an official.

"He knows there's a new world order but he confuses all the facts and gets to
the wrong conclusion. Why would we join Africa, a continent tearing itself apart
with conflict?"

LOAD-DATE: October 20, 2000

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                     October 17, 2000, Tuesday Surveys BBK1

SURVEY - BUSINESS BOOKS: Reflections on a period of profound change: The third
volume of BP's corporate history vividly evokes the scale of adjustment in the
oil industry and depth of political and economic development in these difficult
years

BYLINE: By MAX WILKINSON

SECTION: SURVEY - BUSINESS BOOKS; Pg. 1

LENGTH: 991 words


The recent tripling of world oil prices to a peak of more than Dollars 34 per
barrel hassent shivers of recollection through the western world. Could it be
that the history of the 1960s and 1970s is about to be repeated? For now, as
then, the developed economies are in a period of steady expansion which is
sucking oil from Gulf states almost as fast as they can produce it. Could it be
that a sudden disruption of supply will again send prices to panic levels and
stop the western economies in their tracks?

Most experts answer "no", partly because oil producers and consumers have
learned lessons from the 1970s, and partly because the world of oil has changed.
James Bamberg's exciting and well-written history of BP shows how profound those
changes have been. This is the third of what will presumably be four parts and
covers a period of radical development in the industry. It therefore ranges far
wider than the story of one company and offers fascinating insights into the
political and economic developments of the period.

It starts in an almost forgotten world, when Britain still regarded itself as a
world power, and state-controlled BP was considered an important arm of its
influence. The company's wealth was based almost entirely on vast oil reserves
discovered in Persia (Iran since 1935) from concessions gained with the help of
Britain's imperial might. It was a world in which public school boys took nearly
all the top jobs.

It was also a world of the white man's enclave, where tennis and tea were more
highly prized than fraternising with the natives. Indeed, the people whose land
gushed with such enormous wealth were mostly employed only in menial capacities.
At that time BP owned about a quarter of the world's known oil reserves.

The presumption that western companies had perfect freedom to exploit oil
resources in foreign lands received an unpleasant jolt in 1951, when Muhammad
Mussadiq, Iran's new prime minister, nationalised BP's assets, and the company's
2,500 staff were sent home. This is one of several exciting stories in the book.

There were huge implications for BP, as it turned outwards to look for oil in
other regions. But it was not yet the turning point for the industry. The seven
major companies had been operating in a kind of club, helping each other out
with supplies. So with assistance from its sisters, BP was able to adjust
surprisingly smoothly to the loss of control over most of its crude supply.

Co-operation among the majors was put to a much tougher test in 1956, during the
Suez crisis. Bamberg does an excellent job in recounting the arrogance and
stupidity that led to the Franco-British invasion of Egypt, and he gives a good
account of the behind-the-scenes negotiations between western governments and
oil companies for ameliorating the supply crisis.

Like an early heart attack, this should have been a warning to the west about
what might happen if the oil stopped pumping. But despite efforts - with BP in
the fore - to find new oil in the North Sea, Alaska and elsewhere, the warning
was insufficiently heeded. Oil prices were held at low levels throughout the
1960s, even when it was evident the rapid increase in consumption and switch
from coal to oil would eventually create a crisis of supply.

When the crunch came, after Muammar Qaddafi's seizure of power in Libya in 1969,
the oil companies presented a (nearly) solid phalanx in trying to resist price
rises, first from Dollars 2.23 per barrel to Dollars 2.53, and then rapidly to
Dollars 3.45 by March 1971.

It was clear by then that the oil companies had completely lost control of the
market, so great was the demand in the west and its dependence on uninterrupted
supply. So the rise above Dollars 11.5 during the Yom Kippur War, and the oil
embargo in 1973, was not entirely surprising. Even without a war, enough Arab
states wanted economic revenge on the west, while the more moderate states were
happy to turn the tables after years of exploitation.

Bamberg tells this tale in a wryly objective tone. He remarks, for example, that
the top negotiators for the Organisation of Petroleum Exporting Countries were
"easily a match for the oil companies in education and expertise", with a
glittering array of qualifications from US universities.

By contrast, Sir Eric Drake, BP's domineering chairman, appears rather a sad
figure trying obstinately to stand against the tide. Sir Eric had his moment of
glory, however, when Edward Heath, the British prime minister, asked BP to
renege on international contracts to favour the home country. Sir Eric refused.
Heath was outraged. But as Bamberg discovered from the archives, BP did in fact
secretly bend the rules to help its political masters.

The tangled relationship between BP and the British government, its majority
shareholder, forms an interesting thread throughout this narrative. In 1955, for
example, R.A. Butler, then chancellor, made strenuous efforts to prevent the
company from announcing a big increase in dividends - that would have run
counter to the Tory government's quaint policy of voluntary dividend restraint.

Butler lost his battle against BP's redoubtable Lord Strathalmond, and wrote in
private: "It is impossible to go along with these stooges and I must review our
association with this unpatriotic organisation." In public, however, he said:
"It has not been our practice to interfere in the commercial management of the
company."

For such insights, for its historical breadth and for a first-rate account of
the politics and internal development of company strategy, this book should
appeal to a much wider readership than its bulk and title might suggest. Whether
it also helps to predict the next oil crisis must be left to the reader.

Max Wilkinson

Order British Petroleum and Global Oil at a special price of Pounds 76/Pounds 24
(free UK p&p) from +44 (0)20 8324 5511 or www.ftbookshop.com

LOAD-DATE: October 16, 2000

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                             1209 of 2746 DOCUMENTS

                        Financial Times (London,England)

                    October 14, 2000, Saturday USA Edition 2

LETTERS TO THE EDITOR: Rubin telling the same old story

BYLINE: By PETER DUNSMORE

SECTION: LETTERS TO THE EDITOR; Pg. 6

LENGTH: 156 words


From Mr Peter Dunsmore.

Sir, James P. Rubin was given considerable space in your columns over two
weekends. I cannot think why. Of all the biased, blinkered accounts of the war
in Yugoslavia his must rank with the worst.

Once again we are told the old lie: "Air strikes were the only option we had."
After Libya, Sudan and Afghanistan, perhaps Americans have come to regard
bombing people as an acceptable substitute for thought. Mr Rubin attributes base
motives to the Italians for opposing those strikes.

He has not one word of regret for the effects on the ground of Madeleine
Albright's "moral crusade" - a trail of death, wanton destruction and pollution,
with Kosovo now a gangster state.

In conclusion, Mr Rubin admits to a "shining moment of pride" at his country's
achievements. I can only suppose that, like his president, he has lost all sense
of shame.

Peter Dunsmore, 35 Holland Park, London W11 3TA, UK

LOAD-DATE: October 13, 2000

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                        Financial Times (London,England)

                     October 13, 2000, Friday USA Edition 1

LATIN AMERICA AND THE CARIBBEAN: Little joy in Cuba as US partially eases
trading rules

BYLINE: By PASCAL FLETCHER

SECTION: LATIN AMERICA AND THE CARIBBEAN; Pg. 7

LENGTH: 468 words

DATELINE: HAVANA


The historic move by the US Congress this week to modify the trade embargo
against Cuba and allow US food and medicine sales to the communist-ruled island
has generated more frustration than celebration so far.

The bill, passed by the House of Representatives on Wednesday, exempts food and
medicine from sanctions against countries such as Cuba, Iran, Libya, Sudan and
North Korea.

But in Cuba's case the legislation, which President Clinton has said he will
sign into law after Senate approval, expected within days, bars US public or
private financing for the sales. It also codifies into law rules, most already
existing, that restrict and regulate travel by US citizens to Cuba.

In public, President Fidel Castro's government has scornfully dismissed the bill
as a publicity stunt aimed at trying to convince the world that the embargo is
being relaxed. Cuba refused to trade under these restrictive conditions.

The limited legislation and the answering Cuban rejection were a slap in the
face for the scores of US farmers and businessmen who have trekked to Havana in
the past two years to reconnoitre the previously forbidden Cuban market.

But at least one group of US visitors was trying to persuade their sceptical
Cuban hosts this week that the food sales initiative, while limited, bedevilled
by politics and entangled with obstacles, could still be made to work.

"We are trying to keep things moving, trying to find a practical way to get
trade going," said Alan Tracy, president of US Wheat Associates, a
Washington-based organisation that promotes US wheat exports.

"The American wheat farmer is just as frustrated and disappointed as the Cubans
are," said Henry Jo Von Tungeln, the group's vice-chairman. "But Congress has
given us this opportunity and we are going to try to develop it," he added.

The US visitors did not see the block on US financing as an insurmountable
obstacle. They argued that third-party foreign financing could be arranged.

Extra funding costs would be more than compensated for by the cheaper rate of
shipping from nearby US ports instead of from

Europe, Canada or Asia.

Remaining restrictions on US-Cuba shipping links were a problem but Mr Tracy
said they could be tested. "It was clearly Congress's intention that trade be
allowed," he said.

Also in Havana this week was a delegation led by Tommy Irvin, the veteran
Georgia state agriculture commissioner. The Georgia visitors, who included
leading US poultry exporters, said they would be ready to sell to Cuba today if
this was possible.

Mr Tracy said he found some Cuban officials receptive to the idea of trying to
make food sales work. "My impression was that if this legislation turns out to
be practically workable, they wouldn't stand in the way of shipments," he said.

LOAD-DATE: October 12, 2000

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                        Financial Times (London,England)

                   October 5, 2000, Thursday London Edition 3

WORLD NEWS: TRADE: US companies move quietly into Iranian markets: Washington
stands accused of hypocrisy in its trade sanctions policy. Guy Dinmore and
Edward Alden report

BYLINE: By EDWARD ALDEN and GUY DINMORE

SECTION: WORLD NEWS: TRADE; Pg. 15

LENGTH: 959 words


US companies are quietly strengthening their presence in Iran, circumventing US
sanctions in the expectation that improved relations between the two countries
will lead to a lifting of Washington's unilateral trade embargo within a year.

In a calculated gamble that Washington will not raise objections, the companies
have found ways to use foreign subsidiaries or Iranian middle-men to sell to
Iran without technically violating the sanctions regime.

But European businesses exhibiting at Tehran's trade fair this week accused
Washington of double standards, saying the US is turning a blind eye towards its
own companies dealing with Iran, while harassing foreign groups operating in the
Iranian market when they seek business in the US.

The double-standard is indicative of Washington's current ambivalence towards
Iran. The Clinton administration has signaled repeatedly that it would like to
see warmer relations with Tehran.

Observers say that President Bill Clinton is eager for an opening to Iran that
could become part of his foreign relations legacy, alongside the recent trade
deals with China and Vietnam. "There's no question that both sides are looking
to do something," said one former US official with close ties to Iran.

But Iran remains a political time-bomb in the US. The recent convictions of 10
Iranian Jews on espionage charges has angered the powerful US Jewish community
and its congressional supporters, certainly blocking any chance of even a modest
US initiative until after the November elections.

President Clinton, citing Iran as a threat to national security, signed an
executive order in 1995 that barred US business dealings with Iran. In 1996, the
US Congress passed the Iran-Libya Sanctions Act, which allows for US sanctions
against foreign companies participating in Iran's oil industry.

However, none of these efforts is preventing American brand-name products from
being widely available in Iran.

For example, Iranian police and other security services use Motorola radios that
a government official said were procured in Asia.

Local manufacturer Noushab in Tehran sells an Iranian-made soft-drink, with
imported flavourings, in Coca Cola bottles bearing the famous logo. Nissan Sharq
in Mashhad does the same with Pepsi and told the FT it hoped to produce under
license from Pepsi in the future.

Coca Cola supplies syrup to a plant in Iran, under an arrangement the company
said is authorised by a special licence from the US Treasury Department. Pepsi
is also trying to penetrate the market.

General Motors has also held discussions with Pars Khodro, an Iranian carmaker
to get back into the Iranian market, Iranian officials say. General Motors owned
Pars Khodro before it was national-ised after the 1979 revolution.

Products of Hewlett Packard and Intel are common sights on Jomhouri Street,
Tehran's most popular area for computer equipment.

Many of the products make their way to Iranian markets courtesy of Iranian
middle-men, particularly in Dubai.

Iranian business consultants say Xerox and Kodak are both pushing into Iran
through Dubai. Said one consultant: "The US is not monitoring things very
closely. They must know that agents in Dubai are importing far more US goods
than the local Dubai market can absorb."

But more direct routes are also available. While the trade embargo prohibits
foreign subsidiaries of US companies from trading with Iran under the direction
of the parent company, this restriction is in practice easily sidestepped.

As long as the US parent does not "facilitate" the transaction or directly
approve the actions of a foreign subsidiary, those subsidiaries are free to deal
with Iran.

That channel has been particularly important for US oil companies, which fear
they will be frozen out of participating in the development of Iranian
oilfields. Conoco, the US oil group, has analysed seismic data for the National
Iranian Oil Company through its British subsidiary.

Those transactions are under investigation by the Office of Foreign Assets
Control, the US Treasury agency which enforces the trade embargo. Conoco has
denied violating the embargo.

Senior Iranian officials say Halliburton, the US oilfield services company,
supplies oil equipment. Dick Cheney, the Republican vice-presidential candidate
and former Halliburton chief executive, has urged an easing of the US sanctions.
Mr Cheney ha